OMRON Corporation Reports Earnings for Fiscal 2007

Business Wire, April 28, 2008

KYOTO, Japan -- OMRON Corporation (TOKYO:6645)(US:OMRNY) has reported earnings for the full fiscal year 2007, ended March 31, 2008.

1. Overview of Fiscal 2007

The Omron Group's net sales for the fiscal year were JPY 762,985 million, an increase of 5.4 percent from the previous fiscal year., supported by the effects of the weaker yen and business acquisitions. Operating income increased 5.2 percent from the previous fiscal year to JPY 65,253 million, mainly as a result of higher net sales. Income from continuing operations before income taxes((*1)) was JPY 64,166 million, a decrease of 0.2 percent from the previous fiscal year due to gain on sale of investment securities and other factors. In the previous fiscal year, the Omron Group recorded a gain on the establishment of a retirement benefit trust and a loss on the sale of the land and buildings of its Tokyo Head Office. Net income for the fiscal year was JPY 42,383 million, an increase of 10.7 percent from the previous fiscal year due to factors including a gain on the transfer of a business.

(*1) Pursuant to Financial Accounting Standards Board (FASB) Statement No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," figures for the fiscal year ended March 31, 2007 have been reclassified in relation to operations discontinued during the first quarter of the fiscal year ended March 31, 2008.

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

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Results by Business Segment

Industrial Automation Business (IAB)

Operations in Japan were impacted by a slowdown in expansion of capital investment among customers in the semiconductor and electronic components industry in comparison with the previous fiscal year and a decrease in capital investment in the flat panel display (FPD) industry, although investment remained firm among manufacturers in general. Beginning in fiscal 2007, the Omron Group worked to reinforce its sales infrastructure in order to expand the applications business, which focuses on quality, safety and the environment. Sales of the application sensor business and safety component business in particular increased over the previous year.

In addition, sales of Laserfront Technologies (now OMRON LASERFRONT INC., hereinafter "OLFT"), in which Omron acquired a 95 percent stake at the end of June 2007, contributed to domestic sales of this segment from July onward.

Overseas, demand for programmable controllers and motion controllers in Europe was solid, and sales of image sensors expanded. In North America, demand for control equipment for oil and gas-related companies, which had remained strong, fell sharply in the fourth quarter. Omron worked to compensate for this by expanding its core factory automation business and ancillary services, but overall sales were impacted by the slowing economy. In China, sales increased on the back of strong sales of products including programmable controllers and AOI, a result of the Omron Group's focus on strengthening its sales force and rolling out new products.

As a result, segment sales for the fiscal year totaled JPY 328,811 million, an increase of 7.6 percent compared with the previous fiscal year.

Electronic Components Business (ECB)

In Japan, consumer spending and capital investment remained firm in the first half of the period, but overall, the semiconductor and automobile manufacturing industries slowed, and inventory adjustments continued in the consumer and commerce components industry, a key market for this segment. Overseas, electronic manufacturing services (EMS) in China, which had been strong, slowed down.

In this business environment, sales of PCB relays, a core product, were flat overall, as sales of air conditioner relays expanded due to increased demand in the BRIC countries and other emerging markets, but sales of relays for communications were sluggish. On the other hand, sales of electronic components such as HMI devices and thin connectors for mobile and IT devices increased strongly because they met customer needs for slimmer products.

In addition, the backlight business of OMRON PRECISION TECHNOLOGY Co., Ltd., which was included in the scope of consolidation in August 2006, contributed to sales, and OMRON SEMICONDUCTORS Co., Ltd., posted solid sales overall after starting contract manufacturing of semiconductors in April 2007.

As a result, segment sales for the fiscal year totaled JPY 154,233 million, an increase of 11.5 percent compared with the previous fiscal year.

Automotive Electronic Components Business (AEC)

Global automobile production volume during the fiscal year was generally steady, and Omron products continued to be adopted in new cars, reflecting the demand for car electronics that support automobile safety and environmental friendliness. As a result, sales of this segment increased strongly. By geographic region, sales in Japan were solid, and overseas, sales of keyless entry systems and other wireless devices were strong in North America despite a challenging market environment in which automobile sales volume remained at the level of the previous fiscal year. Furthermore, in China, where automobile manufacturers are shifting production and expanding global procurement, Omron's Chinese manufacturing subsidiary steadily expanded production, and sales to the Chinese market increased substantially.