OMRON Corporation Reports Fiscal 2011 Third Quarter Consolidated Performance

TOKYO--(BUSINESS WIRE)--

OMRON Corporation (TOKYO:6645)OMRNY today reported consolidated performance for the third quarter of fiscal 2011, ending March 31, 2012.

Consolidated net sales for the nine months ended December 31, 2011, increased 0.3 percent compared with the same period of the previous fiscal year to JPY 452,859 million. Operating income decreased 18.9% to JPY 30,137 million, income before income taxes decreased 26.8% to JPY 26,323 million, and net income attributable to shareholders decreased 49.8% to JPY 11,641 million.

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

1. Overview of Conditions

During the first nine months of fiscal 2011 (April 1 – December 31, 2011), the Japanese economy was sluggish overall despite signs of recovery in some sectors, as corporate production activities and consumer spending dropped due to the Great East Japan Earthquake that occurred in March 2011. In overseas economies, tighter credit in China, a persistently high unemployment rate in the United States and the deteriorating financial situation in some European countries, together with flooding in Thailand in October, contributed to a growing perception of a slowdown.

In markets related to the Omron Group, demand for automotive electronic components and healthcare equipment decreased in Japan due to the effects of the earthquake. Overseas, capital investment demand was solid due to expanding demand resulting from economic growth in emerging markets, although growth in capital investment demand weakened in China with rising concerns about an economic slowdown brought on by credit tightening.

The average exchange rates for the nine months ended December 31, 2011 were USD 1 = JPY 79.2 and EUR 1 = JPY 111.4 (7.7 yen and 2.1 yen less than the same period of the previous fiscal year, respectively).

Consolidated Sales and Income
(Percentages represent changes compared with the same period of the previous fiscal year).
Millions of yen - except per share data and percentages
		Nine months ended December 31, 2011				Nine months ended December 31, 2010
				Change (%)				Change (%)
Net sales		452,859		0.3		451,311		21.8%
Operating income		30,137		(18.9)		37,179		-
Income before income taxes		26,323		(26.8)		35,945		-
Net income		11,641		(49.8)		23,167		-
Net income per share (JPY)		52.89				105.24
Net income per share, diluted (JPY)		52.89				105.24

Note: Number of consolidated subsidiaries: 154. Number of companies accounted for by the equity method: 13.

Results by Business Segment

Industrial Automation Business (IAB)
IAB segment sales to outside customers for the nine months ended December 31, 2011, totaled JPY 205,910 million, an increase of 1.1 percent compared with the same period of the previous fiscal year.

In Japan, capital investment demand in the semiconductor and electronic component industries was weak, but capital investment demand in the automotive and machine tool industries firmed with increased demand from Japanese companies because of factors including a recovery in demand due to reconstruction following the earthquake and the impact of the flooding in Thailand. Sales in Japan for the nine months ended December 31, 2011, were essentially the same as in the same period of the previous fiscal year.

Overseas, inventory adjustment due to credit tightening in China and lower capital investment demand in Asia caused by a slump in the liquid-crystal panel industry in South Korea were factors that reduced sales, but sales in China and Asia were firm compared with the same period of the previous fiscal year. Despite the uncertain impact of monetary and fiscal instability in Europe, sales in Europe remained essentially unchanged from the same period of the previous fiscal year. Sales in North America were strong, supported by solid underlying capital investment demand and increased demand for control equipment in the petroleum industry. Overseas sales for the nine months ended December 31, 2011, therefore increased compared with the same period of the previous fiscal year.

Electronic Components Business (ECB)
ECB segment sales to outside customers for the nine months ended December 31, 2011, totaled JPY 61,978 million, an increase of 1.9 percent compared with the same period of the previous fiscal year.

In Japan, sales were firm of products to the automotive industry, which recovered from the earthquake, and certain products in consumer industries where there was reconstruction demand. However, sales in Japan for the nine months ended December 31, 2011 decreased compared with the same period of the previous fiscal year as a result of a downturn in various industries during the first quarter due to the earthquake.

Overseas, the flooding in Thailand impacted product sales to the automotive industry in Asian markets. In China, however, while inventory adjustment continued for certain products for consumer industries, sales of products for the automotive industry and products that incorporate mobile devices were strong. Overall overseas sales for the nine months ended December 31, 2011 therefore increased compared with the same period of the previous fiscal year.

Automotive Electronic Components Business (AEC)
AEC segment sales to outside customers for the nine months ended December 31, 2011, totaled JPY 61,238 million, a decrease of 3.9 percent compared with the same period of the previous fiscal year.

In Japan, automobile manufacturers gradually recovered from the earthquake-related drop in production from the second half of the first quarter, and increased production to restore inventories of finished vehicles in the market to stable levels was apparent among certain automobile manufacturers. However, due to factors including the impact of procurement problems for electronic parts caused by flooding in Thailand during the third quarter, sales in Japan for the nine months ended December 31, 2011 decreased compared with the same period of the previous fiscal year.

In North America, demand decreased from some Japanese automobile manufacturers due to the impact of the earthquake, but demand was firm from North American automobile manufacturers. Moreover, while demand in South Korea and emerging markets including China was strong, overall overseas sales for the nine months ended December 31, 2011 decreased compared with the same period of the previous fiscal year due to the impact of currency translation and the flooding in Thailand.

Social Systems Business (SSB)
SSB segment sales to outside customers for the nine months ended December 31, 2011, totaled JPY 32,985 million, a decrease of 5.2 percent compared with the same period of the previous fiscal year.

Public Transportation Systems Business:
Motivation for capital investment among Japanese railway companies did not recover to pre-earthquake levels. Moreover, a major customer in Japan made a large-scale introduction of new equipment (automated ticket machines and automated ticket gates) in the previous fiscal year. Consequently, sales for the nine months ended December 31, 2011 were weak compared with the same period of the previous fiscal year.

Traffic and Road Management Systems Business:
Sales for the nine months ended December 31, 2011 were firm, with the partial delivery of equipment that had been delayed from the end of the previous fiscal year due to the earthquake in Japan, delivery of equipment for earthquake reconstruction, and related installation.

Healthcare Business (HCB)
HCB segment sales to outside customers for the nine months ended December 31, 2011, totaled JPY 46,302 million, an increase of 0.9 percent compared with the same period of the previous fiscal year.

In Japan, Demand for professional medical equipment for use in hospitals benefited from steady sales of the world's first equipment for measuring visceral fat percentages from October 2011, but sales of mainstay vital sign monitors were flat. Regarding demand for healthcare equipment, market share gains were seen for new products (activity monitors, body composition monitors and digital thermometers). However, sales for the nine months ended December 31, 2011 decreased compared with the same period of the previous fiscal year due to the impact of the earthquake in the first half.

Overseas, Demand for Omron's healthcare equipment continued to increase. Sales from October onward remained at the same level as the same period of the previous fiscal year in Western Europe and North America, where consumption slowed. However, sales were strong in emerging market areas, particularly China, Southeast Asia, the Middle East, and Central and South America. Despite the impact of the strong yen, overall overseas sales for the nine months ended December 31, 2011 increased compared with the same period of the previous fiscal year.

Other
The "Other" segments are primarily responsible for exploring and nurturing new businesses and nurturing/reinforcing businesses not handled by other internal companies.

Segment sales to outside customers for the nine months ended December 31, 2011, totaled JPY 39,536 million, an increase of 4.7 percent compared with the same period of the previous fiscal year.

Environmental Solutions Business HQ's results were strong, with a substantial increase in sales of sensors for measuring electricity usage and equipment for monitoring electricity demand due to corporate programs to conserve electricity as a result of the earthquake in Japan.

Electronic Systems & Equipments Division HQ's sales were strong because of increased demand for uninterruptible power supplies to deal with power supply concerns resulting from the earthquake in Japan.

Micro Devices HQ's sales weakened due to factors including a decline in demand for contract chip manufacturing and the impact of currency translation on product sales outside Japan.

Backlight business sales in Japan decreased with the continued shift to overseas production among panel manufacturers, but overseas, the smartphone market grew although mobile phone demand dropped by half. As a result, overall sales were robust.

2. Consolidated Financial Position and Cash Flows

Total assets as of December 31, 2011 decreased JPY 39,507 million compared with the end of the previous fiscal year to JPY 523,283 million as cash and cash equivalents decreased due to repayment of short-term debt and notes and accounts receivable – trade decreased.

Total liabilities decreased JPY 34,102 million compared with the end of the previous fiscal year to JPY 215,036 million, reflecting a decrease in short-term debt. Net assets decreased JPY 5,405 million from the end of the previous fiscal year to JPY 308,247 million due to changes in foreign currency translation adjustments. The shareholders' equity ratio was 58.7 percent, compared with 55.6 percent at the end of the previous fiscal year.

Net cash provided by operating activities for the nine months ended December 31, 2011 was JPY 12,983 million (a decrease of JPY 13,437 million compared with the same period of the previous fiscal year) due to a decrease in net income and an increase in inventories. Net cash used in investing activities was JPY 17,688 million (an increase in cash used of JPY 4,838 million compared with the same period of the previous fiscal year), primarily because Omron conducted capital investment in emerging markets where future growth is expected. Net cash used in financing activities was JPY 22,498 million (an increase in cash used of JPY 14,673 million compared with the same period of the previous fiscal year) due to a decrease in short-term debt.

As a result, the balance of cash and cash equivalents at December 31, 2011 was JPY 44,699 million, a decrease of JPY 30,036 million from the end of the previous fiscal year.

Consolidated Financial Position
		Millions of yen - except per share data and percentages
		As of December 31, 2011		As of March 31, 2011
Total assets		523,283		562,790
Net assets		308,247		313,652
Shareholders' equity		307,343		312,753
Shareholders' equity ratio (%)		58.7		55.6

Consolidated Cash Flows
		Millions of yen
		Nine months ended December 31, 2010		Nine months ended December 31, 2011
Net cash provided by operating activities		26,420		12,983
Net cash used in investing activities		(12,850)		(17,688)
Net cash used in financing activities		(7,825)		(22,498)
Cash and cash equivalents at end of period		54,809		44,699

3. Dividends
				Year ended March 31, 2011		Year ending March 31, 2012		Year ending March 31, 2012 (projected)
Dividends per share		1st quarter dividend (JPY)		—		—
		2nd quarter dividend (JPY)		14.00		14.00
		3rd quarter dividend (JPY)		—		—
		Year-end dividend (JPY)		16.00				14.00
		Total dividends for the year (JPY)		30.00				28.00

Note:	Revisions since the most recently announced dividend forecast: Yes
	Please refer to "Omron Announces Revision of Fiscal 2011 Consolidated Performance Forecast, Reversal of Deferred Income Tax Assets, and Revision of Dividend Forecast," released today (January 27, 2012), regarding the revision of the dividend forecast.

4. Fiscal 2011 Consolidated Performance Forecast

In markets related to the Omron Group, in addition to the economic slowdown caused by credit tightening in China and the credit crisis in Europe, the trend toward the appreciation of the yen in currency translation is expected to exert a continuing impact on the Group's business performance. As a result, in the fourth quarter a decline in net sales is forecast and the Omron Group plans to carry out an adjustment of production output. Moreover, net sales and each type of income are expected to fall short of their respective previous performance forecasts due to the recording of a reversal of deferred income tax assets in connection with the enactment of the Law Concerning Reduction of the Corporate Income Tax Rate. Accordingly, the figures in the performance forecast announced on October 27, 2011 have been revised as shown below.

The assumed exchange rates for the fourth quarter are US$1 = JPY 76 and 1 Euro = JPY 98.

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.

Projected Results for the Fiscal Year Ending March 31, 2012 (April 1, 2011 - March 31, 2012)
(Percentages represent changes compared with the previous fiscal year)
		Net sales		Operating income		Income before income taxes		Net income attributable to shareholders		Net income attributable to shareholders per share
Previous forecast (A)		620,000		46,000		43,000		27,000		JPY 122.68
Revised forecast (B)		615,000		37,000		30,000		14,000		JPY 63.61
Difference (B – A)		(5,000)		(9,000)		(13,000)		(13,000)		—
Difference (%)		(0.8%)		(19.6%)		(30.2%)		(48.1%)		—
Reference: Actual results for the fiscal year ended March 31, 2011		617,825		48,037		41,693		26,782		JPY 121.66

Note: Revisions to projected results during the nine months ended December 31, 2011: Yes

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 36,000 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, healthcare, and the environment. The company has regional head offices in Singapore (Asia Pacific), Shanghai (Greater China), Amsterdam (Europe, Africa, and the Middle East), Chicago (the Americas), and Gurgaon (India).
For more information, visit the Omron website at http://www.omron.com/