Omron Corp

Content

1. Corporate Overview Omron Corp. operates in six business segments industrial automation, automotive electronics, social system business segment, healthcare segment, electronic component business and business development group. 1.1 Corporate History 1948: Incorporation of Omron Tateisi Electronic Co. 2002: Establishes a manufacturing unit in China 1.2 Key Facts Net Sales (2005)-US$5.65 billion Total Assets (2005)-US$5.3 billion 1.3 Subsidiaries/Affiliates 1.4 Organizational Chart 1.5 Profiles of Key People Chairman- Yoshio Tateisi President & CEO- Hisoa Sakuta 1.6 Recent Developments In August 2006, Omron acquired Optical Communication Components business of NHK Spring Also in August 2006, Omron introduced its new global reader platform 2. Business Description 2.1 Business Segments Industrial Automation Business (IAB) Electronic Components Business (ECB) Automotive electronic Components (AEC) Social System Business (SSB) Healthcare Business (HCB) Business Development Group & Other Business 2.1.1 Products/Services 2.2 Geographical Segmentation In FY06, revenues of Omron Corp from Asia and the Rest of the World accounted for 59%. 2.3 Key Partnerships/Alliances 3. SWOT Analysis 3.1 Strengths Dominance in high precision sensors market High brand recognition in healthcare segment 3.2 Weaknesses Delayed entry in flat-panel TV backlights market 3.3 Opportunities Recovering Japanese economy Growing Asian automotive electronics market 3.4 Threats Counterfeiting issues and competition in China 4. Key Business Strategies Expanding Through New Technology Focusing on the Chinese Market Strengthening the Safety Device Business Inorganic Growth 5. Financial Performance 5.1 Financial Highlights Omron Corps revenues fell by 2.2% y-o-y in 2005; however Net Income increased 12.5% y-o-y in the same year. 5.2 Five-Year Financial Summary Omron Corps revenue reached US$5.5 billion in 2006 at a CAGR of 6.7% from US$4.3 billion in 2002. 5.3 Ratio Analysis Omron witnessed a rise in its cost of sales during the fiscal year 2005. The cost of sales as a percentage of sales increased from 59.0% in 2005 to 62.1% in 2006 as a result of a surge in raw material prices and changes in the product mix. 5.4 Market Indicators 5.4.1 Stock Chart 5.4.2 Earnings Estimates With expansion into the Asian markets, such as China, India and Taiwan, the earning estimates for the Omron group predict an increase in sales in the next few years. 6. Competitive Landscape 6.1 Industry Overview 6.1.1 Industry Definition and Segmentation 6.1.2 Key Drivers Increasing Labor Costs Need for Increasing Efficiency and Productivity Increasing Demand for Process Automation 6.1.3 Major Trends Automation has become a Commodity Growing Demand of Industrial Robots in Niche Markets 6.1.4 Outlook The global industrial automation industry is witnessing a shift from selling independent products to selling complete solutions. 6.2 Competition Alps Electric Oki Electric 6.2.1 Competitive Positioning 6.2.2 Geographical Coverage Oki Electric has its highest presence in the domestic market at 73%. 6.2.3 Client Base Financial Institutions, Government Agencies, Automotive Equipment Manufacturers 6.2.4 Financial Assessment Alps Electric has the highest CAGR of 9.8% among its peers. 6.2.5 Stock Market Performance Omron Electric has had the highest performing stock since the start of 2006. 7. Outlook 7.1 Company View Omron predicts moderate economic growth for Q206 and 2007. The company is expecting steady consumer spending and solid capital investments from corporate big guns. 7.2 Analyst View Analysts dont hold out a very positive outlook for Omron. Delays in the recovery of automobile electronics component business (AEC) and rising materials cost are expected to make a dent in the growth rate projected by the company. Appendices Appendix I Income Statement, 2003-2005 Appendix II Balance Sheet, 2003-2005 List of Tables/Figures Table 1.1 Key Facts Table 1.2 Subsidiaries/Affiliates Table 2.1 Products / Services (2005) Table 2.2 Key Partnerships/Alliances/Agreements Table 5.1 Financial Highlights (2004-2005) Table 6.1 Competitors (2005) Table 6.2 Competitive Positioning Table 6.3 Client Base Figure 2.1 Revenue Share by Operational Division (FY2006) Figure 2.2 Revenue Share by Geography (2006) Figure 4.1 Sales Growth in China (2003-2007) Figure 4.2 Target for Expanding the Safety Business (2005-2008) Figure 5.1 Revenue Growth (2002-2006) Figure 5.2 Operating Income Growth (2002-2006) Figure 5.3 Net Income Growth (2002-2006) Figure 5.4 Fully Diluted EPS (2002-2006) Figure 5.5 Total Shareholders Equity (2002-2006) Figure 5.6 Profitability Ratios (2005-2006) Figure 5.7 Performance Ratios (2005-2006) Figure 5.8 Stock Performance (Sep2005 to Aug2006) Figure 5.9 Sales and Income Estimates (2005-2008) Figure 6.1 Industry Segments Figure 6.2 Revenues by Geographical Segments (2005) Figure 6.3 Revenues (FY2005) Figure 6.4 Net Income (FY2005) Figure 6.5 Stock Market Performance (Aug2005-Aug 2006) Figure 7.1 Operating Income (2003-2007) Figure 7.2 Forecast Sales Growth in New Tech Business (2003-2007)