Omron Corporation TSE:6645

OMRON : Presentation Materials of Financial Results

Published August 2, 2024 at 1:26 p.m. UTC

Source: MarketScreener

Q1 FY2024 Earnings

August 2, 2024

OMRON Corporation

Summary

Q1 Results
Overall performance progressing as planned
Sluggish market conditions continued at IAB and DMB. Sales and profits declined compared to the same period last year when backlogs were high
SSB and HCB posted sales growth Y/Y on favorable demand in BPM and railroad businesses, with OP at the same level Y/Y
Structural reforms progressing as planned. Structural reform costs of ¥19.6bn recorded associated with optimizing the number of personnel
Outlook for operating environment for Q2 and beyond
Expect business environment in line with the initial forecasts in general, in Q2 and beyond, despite the variance among industries
Gradual recovery in demand is expected at IAB and DMB from Q2, mainly in the semiconductor area. Strong environment to continue at HCB, SSB and DSB
Message from CFO: ROIC improvement

Contents

１．Q1 FY2024 Results

・・・・ P.4 ～ 7

２．Outlook: Q2 and beyond

・・・・

P.8 ～ 12

１．Q1 FY2024 Results

Q1 Consolidated Results

Overall decline in sales and profits due to Y/Y decline in backlog of orders

(¥bn)

*Structural reform expenses of ¥19.6 bn is recorded as one-time expenses associated
with optimizing personnel numbers and capabilities.	5

Q1 Results by Segment

Sales and profits down Y/Y at IAB and DMB. Sales up Y/Y at HCB and SSB

Sales

(¥bn)

*1.	Figures shown in brackets under OP are segment OPMs.
*2.	DSB includes the financial results of JMDC, the amortization of intangible assets other than goodwill associated with the consolidation, and other
	financial figures related to data business.	6

Q1 Results: Analysis of Change in Operating Income (Y/Y)

Despite the fixed costs reductions, profits fell due to the impact of lower sales in IAB and DMB

Forex

① GP decrease

(¥bn)

impact

on lower sales

③Decreased fixed costs

14.3

+1.2

-17.5

+7.7 （Labor costs +4.0/Expenses +3.7）

JMDC

Lower R&D

consolidation

Lower SG&A

impact

6.3

+2.5

-0.0

②GP margin

+5.2

JMDC

+1.0

improvement

Labor costs

+1.1

Adjustment

-1.1

Expenses

+1.3

+0.5

Q1 FY2023

Q1 FY2024

Labor costs

+2.9

Actual

Mix

-0.3

Actual

Ref: Sales by BC

Expenses

+2.4

Production added

-1.2

（Increase Y/Y）

value

Inventory valuation

SSB

+2.6

loss *

+3.3

（Decrease Y/Y）

Variable costs

IAB

-31.0

+1.6

down

HCB

-3.0

Production cost ratio

-2.6

DMB

-7.9

Others

-0.4

-8.0 Y/Y

* Changed from "Inventory provision" in the previous financial	7
materials to "Inventory valuation loss"

２． Outlook: Q2 and beyond

Operating Environment: Q2 and beyond

Expect business environment in line with the initial forecasts in general, despite the variance among industries

IAB

Industrial

Automation

HCB

Healthcare

SSB

Social Systems,

Solutions &

Service

In line with the initial forecasts, business environment remains sluggish in Q2.

In H2, expect gradual recovery in demand, mainly in digital market *Details on later pages

In line with the initial forecasts, BPM market to grow gradually on a global basis

Cardiovascular: Expect gradual growth on a global basis, centered on Europe, while growth in China slightly below initial expectations

Respiratory: Weaker demand for nebulizers than the initial expectations, affected by the backlash from China's special demand for respiratory diseases and sluggish market conditions

Overall favorable business environment continues; energy market is expected to grow slower than expected in the residential area

Energy: Despite the stagnant demand growth until Q2 due to the resumption of measures to mitigate the sudden change in electricity prices, demand is expected to return to the level initially expected in H2

Railway: Favorable demand as initially expected due to continued capital investment by railway companies

DMB

Device & Module

Solutions

In line with the initial forecasts, expect gradual recovery from H2

DC Equipment/Microwave Devices: Demand continues as initially expected. Driven by increased demand for advanced semiconductors, expect growth from H2

Commodity Devices: Despite some differences among markets, expect gradual recovery from H2

		In line with the initial forecasts, strong business environment continues, centered on

DSB		health big data business
Data Solutions		JMDC: Expect expansion of medical data utilization movements, mainly among pharmaceutical and Life and non-life insurance industries. In
		response to growing social awareness of health and prevention, expect demand for services for insurers and consumers to increase

IAB: Operating Environment Outlook

Expect business environment in line with the initial forecasts in general.

In H2, expect gradual recovery in the semiconductor industry, while NEV demand will remain at a low level

Domains

Digital

NEV

Food/

Household

goods

Medicine/L

ogistics

Others

Outlook for 2Q and beyond

Semiconductors are showing signs of recovery due to increased investment in AI demand and domestic production in China. Orders recover gradually in H2 as inventory at customers/distributors normalizes
PV systems continue to remain at low levels
Investment in EVs/components to remain at the same level as previous year
Cautious investment stance held on in batteries due to the oversupply in China and slowing demand for EVs. With some investments being scaled back or delayed, demand remains low with uncertainty throughout the year
Sluggish investment in Q2, mainly in Europe, but gradual recovery expected from H2
Investments in both medicine/logistics remain at the same level as in H2 of FY23
Investment recovery only at a gradual level, from H1 to H2, remaining at a low level throughout the year