OMRON Corporation Reports Consolidated Performance for First 2 Quarters of Fiscal 2012

TOKYO--(BUSINESS WIRE)--OMRON Corporation (TOKYO:6645)(ADR:OMRNY) today reported consolidated performance for the first two quarters of fiscal 2012 (April 1 – September 30, 2012).

Consolidated net sales in the first two quarters of fiscal 2012 (April 1 – September 30, 2012) increased 0.3 percent compared with the same period of the previous fiscal year to JPY 304,216 million. Operating income was JPY 17,991 million, a decrease of 20.8% compared with the same period of the previous fiscal year; income before income taxes was JPY 17,220 million, a decrease of 18.3%; and net income attributable to shareholders was JPY 12,271 million, a decrease of 5.6%.

Note: All amounts are rounded to the nearest million yen.

1. Overview of Conditions

Although IAB (Industrial Automation Business) sales were sluggish in the first six months of fiscal 2012 compared with the same period of the previous fiscal year (which was influenced by temporary factors including the Great East Japan Earthquake), AEC (Automotive Electronic Components Business), SSB (Social Systems, Solutions and Service Business) and HCB (Healthcare Business) performed strongly, and the Omron Group's net sales were essentially unchanged.

Conditions in the Omron Group's Primary Related Markets
Automotive-related:	Capital investment and component demand was firm everywhere but Europe.
Semiconductor-related:	Capital investment demand was weak, other than for smartphones.
Machine tool-related:	Capital investment demand was firm, mainly in emerging markets.
Home appliance and electronic component-related:	Capital investment in large home appliances and component demand were firm.
Healthcare equipment-related:	Demand was firm due to factors including rising health consciousness in emerging markets.

In this environment, the Omron Group set its policy for fiscal 2012 as "Accelerate the VG2020 strategy and achieve a high-growth, high-profit structure by strengthening competitiveness." The Omron Group implemented this policy to steadily increase sales and profits over the medium-to-long term by promoting its action plan of creating the most powerful industrial automation business; expanding sales in emerging markets, primarily China and other countries in Asia; and expanding sales in environmental businesses by building a strong business model.

Consequently, consolidated results for the six months ended September 30, 2012 were as follows. Compared with the same period of the previous fiscal year, net sales were essentially unchanged, but operating income decreased. The decrease in operating income was mainly due to the depreciation of the euro and the end of the temporary rise in sales (a temporary increase in demand due to the impact of the Great East Japan Earthquake) for IAB (Industrial Automation Business).

The average exchange rates for the six months ended September 30, 2012 were USD 1 = JPY 79.4 and EUR 1 = JPY 101.1 (0.3 yen and 13.0 yen less than the same period of the previous fiscal year, respectively).

Consolidated Sales and Income
(Millions of yen, %)
(Percentages represent changes compared with the same period of the previous fiscal year.)
	Six months ended September 30, 2011	Six months ended September 30, 2012	Year-on- year change	Year ended March 31, 2012	Year ending March 31, 2013 (projected)	Year-on- year change
Net sales	303,258	304,216	+0.3%	619,461	650,000	+4.9%
Operating income [% of net sales]	22,713 [7.5%]	17,991 [5.9%]	-20.8% [-1.6P]	40,136 [6.5%]	46,000 [7.1%]	+14.6% [+0.6P]
Income before income taxes [% of net sales]	21,073 [6.9%]	17,220 [5.7%]	-18.3% [-1.2P]	33,547 [5.4%]	43,000 [6.6%]	+28.2% [+1.2P]
Net income attributable to shareholders	12,998	12,271	-5.6%	16,389	28,500	+73.9%
Net income per share attributable to shareholders (basic) (JPY)	59.06	55.74	-3.32	74.46	129.47	+55.01
Net income per share attributable to shareholders (diluted) (JPY)	59.06	55.74	-3.32	74.46	129.47	+55.01

Results by Business Segment
Industrial Automation Business (IAB)
Millions of yen, except percentages
		Six months ended September 30, 2011	Six months ended September 30, 2012	Increase (Decrease)
Sales to external customers	Japan	61,821	58,677	(5.1)%
	Overseas	81,347	71,216	(12.5)%
	Total	143,168	129,893	(9.3)%
Segment profit		21,413	14,708	(31.3)%

Sales in Japan
Demand was basically unchanged from the same period of the previous fiscal year in automotive-related industries but capital investment demand was sluggish in electronic component and semiconductor-related industries. Consequently, sales of core control equipment weakened. Sales in Japan for the six months ended September 30, 2012 decreased compared with the same quarter of the previous fiscal year because of the end of the temporary rise in sales due to the impact of the Great East Japan Earthquake during the first half of fiscal 2011.

Overseas Sales
Performance in the Americas was firm, supported by a robust automotive industry. In Europe, demand weakened due to ongoing financial instability. In China, although demand was solid, performance weakened due to soft domestic demand. Elsewhere in Asia, despite solid demand in emerging markets overall, demand weakened due to factors including restrained capital investment in the semiconductor and other industries.
Overseas sales for the six months ended September 30, 2012 decreased compared with the same period of the previous fiscal year because of the end of the temporary rise in sales in China and elsewhere in Asia due to the impact of the Great East Japan Earthquake during the first half of fiscal 2011.

EMC (Electronic and Mechanical Components Business)
Millions of yen, except percentages
		Six months ended September 30, 2011	Six months ended September 30, 2012	Increase (Decrease)
Sales to external customers	Japan	11,185	13,375	19.6%
	Overseas	29,586	29,230	(1.2)%
	Total	40,771	42,605	4.5%
Segment profit		4,152	3,210	(22.7)%

Sales in Japan
Demand was flat in consumer industries, but demand in the automotive and other industries rebounded from a decline in the first half of the previous fiscal year caused by the impact of the Great East Japan Earthquake. As a result, sales in Japan for the six months ended September 30, 2012 increased compared with the same period of the previous fiscal year.

Overseas Sales
Demand increased in the automotive industry in the Americas, but decreased in consumer industries. Demand weakened in Europe due to ongoing financial instability. In China, slack exports due to the weak economy in Europe and the depreciation of the euro caused demand in consumer industries to decrease. Consequently, overseas sales for the six months ended September 30, 2012 decreased compared with the same period of the previous fiscal year.

AEC (Automotive Electronic Components Business)
Millions of yen, except percentages
		Six months ended September 30, 2011	Six months ended September 30, 2012	Increase (Decrease)
Sales to external customers	Japan	12,483	15,873	27.2%
	Overseas	27,582	31,384	13.8%
	Total	40,065	47,257	18.0%
Segment profit		1,430	2,780	94.4%

Sales in Japan
Automotive demand was robust due to government support measures for the purchase of eco-friendly cars (extension of tax breaks, reintroduction of subsidies) and strong sales of new model cars. Sales in Japan for the six months ended September 30, 2012 increased compared with the same period of the previous fiscal year, partially as a result of the temporary decrease in sales in the first half of fiscal 2011 due to the Great East Japan Earthquake.

Overseas Sales
Demand for certain components decreased due to austerity policies and the deteriorating labor environment in European economies due to financial instability. Overall, however, demand was strong among overseas automobile manufacturers and in emerging markets. As a result, overseas sales for the six months ended September 30, 2012 increased compared with the same period of the previous fiscal year.

SSB (Social Systems, Solutions and Service Business)
Millions of yen, except percentages
	Six months ended September 30, 2011	Six months ended September 30, 2012	Increase (Decrease)
Sales to external customers	20,454	23,471	14.8%
Segment profit (loss)	(3,492)	(1,881)	–

Public Transportation Systems Business Sales
Sales for the six months ended September 30, 2012 increased compared with the same period of the previous fiscal year due to factors including a rebound in the passenger revenues of railway companies from the temporary decrease in the first half of fiscal 2011 caused by the impact of the Great East Japan Earthquake. Moreover, equipment deliveries and related installation work expanded because railways companies resumed equipment renewals.

Traffic and Road Management Systems Business and Other Sales
In the traffic and road management systems business, sales for the six months ended September 30, 2012 were flat, partially due to the absence of the temporary reconstruction demand in the first half of the previous fiscal year due to the impact of the Great East Japan Earthquake. The environmental solutions business was robust due to increased demand for energy conservation, generation and storage, including a system for purchasing the total amount of renewable energy generated, in addition to an emphasis on expanding solar power generation product share and sales channels.

HCB (Healthcare Business)
Millions of yen, except percentages
		Six months ended September 30, 2011	Six months ended September 30, 2012	Increase (Decrease)
Sales to external customers	Japan	12,482	14,014	12.3%
	Overseas	16,873	18,543	9.9%
	Total	29,355	32,557	10.9%
Segment profit		2,069	1,917	(7.3)%

Sales in Japan
Sales of healthcare products for household use were firm, with robust sales of digital blood pressure monitors (HCB's core product) and new products (new digital blood pressure monitors, body composition monitors, digital thermometers for women, electric toothbrushes, massagers, sleep time monitors, sleep monitors). On the other hand, sales of equipment for use in medical institutions were flat, as medical institutions maintained a careful stance toward investment. Sales in Japan for the six months ended September 30, 2012 increased compared with the same period of the previous fiscal year, due to the temporary decrease in sales in the first half of fiscal 2011 due to the Great East Japan Earthquake.

Overseas Sales
Demand in European markets was weak due to financial instability and the economic downturn. However, demand for healthcare equipment continued to rise in emerging markets such as Russia, China and Southeast Asia. As a result, overseas sales for the six months ended September 30, 2012 were strong overall.

Other
Millions of yen, except percentages
	Six months ended September 30, 2011	Six months ended September 30, 2012	Increase (Decrease)
Sales to external customers	26,187	25,457	(2.8)%
Segment profit (loss)	(2,038)	(648)	–

Businesses in the "Other" segment are primarily responsible for exploring and nurturing new business fields and nurturing/reinforcing businesses not handled by other internal companies.

Environmental Solutions Business Sales
Sales for the six months ended September 30, 2012 were robust due to factors including increased demand for solar power condensers (energy-generation business) amid rising expectations for solar power generation as an alternative source of power.

Electronic Systems & Equipments Division Sales
Demand for industrial-use computers and other products was firm. However, sales for the six months ended September 30, 2012 were flat compared with the same period of the previous fiscal year absent the temporary increase in demand for uninterruptible power supplies in the first half of fiscal 2011.

Micro Devices Business Sales
Although demand for MEMS microphone chips increased substantially, sales for the six months ended September 30, 2012 decreased compared with the same period of the previous fiscal year due to a decrease in demand for outsourced semiconductor production.

Backlight Business Sales
Although the smartphone market was robust, sales for the six months ended September 30, 2012 decreased compared with the same period of the previous fiscal year due to postponement of customer orders.

2. Consolidated Financial Position and Cash Flows

Total assets as of September 30, 2012 decreased JPY 22,608 million compared with the end of the previous fiscal year to JPY 514,715 million, due to a decrease in notes and accounts receivable – trade and other factors. Total liabilities decreased JPY 20,305 million compared with the end of the previous fiscal year to JPY 195,338 million, largely reflecting a decrease in notes and accounts payable – trade. Net assets decreased JPY 2,303 million from the end of the previous fiscal year to JPY 319,377 million due to a change in foreign currency translation adjustments.

The shareholders' equity ratio was 61.8 percent, compared with 59.7 percent at the end of the previous fiscal year.

Net cash provided by operating activities for the six months ended September 30, 2012 was JPY 27,000 million (an increase of JPY 8,629 million compared with the same period of the previous fiscal year) due to collection of notes and accounts receivable - trade, in addition to net income.

Net cash used in investing activities was JPY 13,900 million (an increase in cash used of JPY 2,329 million compared with the same period of the previous fiscal year) due to capital investment in production and other facilities. Net cash used in financing activities was JPY 7,369 million (a decrease in cash used of JPY 26,272 million compared with the same period of the previous fiscal year), due to a decrease in dividend payments and short-term debt.

As a result, the balance of cash and cash equivalents at September 30, 2012 was JPY 49,499 million, an increase of JPY 4,242 million from the end of the previous fiscal year.

Consolidated Financial Position
	Millions of yen - except per share data and percentages
	As of September 30, 2012	As of March 31, 2012
Total assets	514,715	537,323
Net assets	319,377	321,680
Shareholders' equity	318,114	320,840
Shareholders' equity ratio (%)	61.8	59.7

Consolidated Cash Flows
	Millions of yen
	Six months ended September 30, 2011	Six months ended September 30, 2012
Net cash provided by operating activities	18,371	27,000
Net cash used in investing activities	(11,571)	(13,900)
Net cash provided by (used in) financing activities	(33,641)	(7,369)
Cash and cash equivalents at end of period	45,201	49,499

3.  Dividends
		Year ended March 31, 2012	Year ending March 31, 2013	Year ending March 31, 2013 (projected)
Dividends per share	1st quarter dividend (JPY)	—	—
	2nd quarter dividend (JPY)	14.00	14.00
	3rd quarter dividend (JPY)	—		—
	Year-end dividend (JPY)	14.00		—
	Total dividends for the year (JPY)	28.00		—

4. Fiscal 2012 Consolidated Performance Forecast

There is no change to the forecast for the fiscal year ending March 31, 2013, as announced on April 26, 2012. The assumed exchange rates for the third quarter onward in the performance forecasts for the fiscal year are USD 1 = JPY 79 and EUR 1 = JPY 102.

The performance forecast and other forward-looking statements are based on information available to the Company at the present time, and on certain assumptions judged by the Company to be reasonable. Due to a variety of factors, actual results may differ materially from the forecast.

About OMRON
Headquartered in Kyoto, Japan, OMRON Corporation is a global leader in the field of automation. Established in 1933, and headed by President Yoshihito Yamada, OMRON has more than 37,000 employees in over 35 countries working to provide products and services to customers in a variety of fields including industrial automation, electronic components, social systems, and healthcare. The company has five regional head offices in Kyoto (Japan), Singapore (Asia Pacific), Shanghai (Greater China), Amsterdam (Europe, Africa, and the Middle East), and Chicago (the Americas). For more information, visit OMRON's website:
http://www.omron.com/