Market Overview

OMRON's First-Quarter Net Sales Climb 3.1%, to Record ¥209.8 Billion, Driven by Growth in Core Industrial Automation Business and Healthcare Business

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OMRON Corporation today announced its consolidated operating results for
the first quarter of fiscal 2018, ending June 30, 2018.

Net sales increased 3.1%, to ¥209.8 billion, while gross profit rose
4.3%, to ¥87.7 billion; both new record highs for OMRON. These results
boosted the gross profit margin by 0.5 percentage point, to 41.8%, also
a record for a fiscal first quarter. Operating income declined 13.6%, to
¥19.6 billion, while net income attributable to shareholders contracted
5.4%, to ¥14.7 billion. Operating and net income fell as a result of an
acceleration in forward-looking investments mainly in the Industrial
Automation Business. However, OMRON maintains its full year forecast for
income gains by fiscal year-end.

Sales in OMRON's core Industrial Automation Business continued to
expand, rising 7.3%, to ¥102.8 billion. This reflected the steady
progress of i-Automation, a strategic concept for driving innovations at
manufacturing sites targeted at meeting expanding worldwide demand for
labor savings and automation. This business generated significant growth
by providing optimal solutions to manufacturers in a range of sectors,
most notably production investments by Japanese and American automakers
and for investment demand in the semiconductor segment. This business
was also supported by brisk demand for machinery exports principally in
the European food sector, as well as for capital expenditure in Greater
China's growing semiconductor and solar power industries.

Healthcare Business sales advanced 8.5%, to ¥27.9 billion, stemming from
favorable sales of blood pressure monitors, nebulizers, and
low-frequency therapy equipment. Global online channel sales and more
effective efforts to market blood pressure monitors in China made major
contributions.

The Company reaffirmed its full-year results forecasts for fiscal 2018.
Management forecasts net sales to rise 4.7%, to ¥900.0 billion, gross
profit to increase 6.9%, to ¥382.5 billion, operating income to climb
7.8%, to ¥93.0 billion, and net income attributable to shareholders to
advance 2.1%, to ¥64.5 billion. The Company plans to acquire treasury
stock for a second consecutive year, investing up to ¥20 billion to
purchase as many as 5 million shares in the year to July-end 2019. This
buy-back plan underscores OMRON's commitment to improving both
shareholder returns and capital efficiency while investing extensively
in business growth.

Yoshihito Yamada, OMRON President and CEO, commented that, "In the first
quarter, our core Industrial Automation and Healthcare businesses were
the main catalysts for growth. We are beginning to see the growth cycle
accelerate—net sales growth and wider gross profit margins are enabling
us to accrue capital to reinvest in business areas that will drive our
growth in the future. OMRON will remain focused on meeting our full year
earnings forecasts and achieving mid-to-long term business growth by
executing the action plans that we set out at the beginning of the year,
while paying close attention to market developments, given growing
uncertainties surrounding trade issues."

 

Financial Highlights

(Billions of yen)

 
   

First quarter of
fiscal 2017

 

First quarter of
fiscal 2018

  Change
Net sales 203.4 209.8 3.1%

Gross profit

84.1 87.7 4.3%

(Gross profit margin)

(41.4%)

(41.8%)

(0.5 percentage points)
Operating income 22.7 19.6 -13.6%
(Operating income margin)

(11.2%)

(9.3%)

(1.8 percentage point)

Net income attributable to
shareholders

15.5 14.7 -5.4%
Yen to U.S. dollar rate 111.5 108.1 -3.4
Yen to euro rate 121.5 129.9 8.4

*Accounting Standards Update (ASU) No. 2017-07 of the FASB,
Improving the Presentation of Net Periodic Pension Cost and Net Periodic
Post Retirement Benefit Cost is applied to the above results.

 

Fiscal 2018 Forecasts

(Billions of yen)

 
    Fiscal 2017  

Fiscal 2018
forecasts

  Change
Net sales 860.0 900.0 4.7%
Gross profit 357.8 382.5 6.9%
(Gross profit margin) (41.6%) (42.5%) (0.9 percentage point)
Operating income 86.3 93.0 7.8%
(Operating income margin) (10.0%) (10.3%) (0.3 percentage point)

Net income attributable to
shareholders

63.2 64.5 2.1%
Yen to U.S. dollar rate 111.2 107.3 -3.9
Yen to euro rate 129.4 130.7 1.3

*Accounting Standards Update (ASU) No. 2017-07 of the FASB,
Improving the Presentation of Net Periodic Pension Cost and Net Periodic
Post Retirement Benefit Cost is applied to the above results.

Treasury stock acquisition framework
The Company is
acquiring treasury stock to improve capital efficiency, increase
shareholder value per share and enhance returns to shareholders.

 

Acquisition details

(1) Category of shares to be acquired:     Common stock of OMRON Corporation
(2) Number of shares to be acquired: Up to 5,000,000 (representing 2.38% of issued shares (excluding
treasury stock)
(3) Acquisition amount: Up to ¥20,000,000,000
(4) Acquisition period: July 27, 2018, to July 26, 2019
 

About OMRON Corporation
OMRON Corporation is a global leader
in the field of automation based on its core technology of "Sensing &
Control + Think." OMRON's business fields cover a broad spectrum,
ranging from industrial automation and electronic components to
automotive electronic components, social infrastructure systems,
healthcare, and environmental solutions. Established in 1933, OMRON has
about 36,000 employees worldwide, working to provide products and
services in 117 countries and regions. For more information, visit
OMRON's website: http://www.omron.com/

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