Regarding Japan´s domestic economy during FY2000, consumer spending remained sluggish, but an increase in private capital investment has seen Japan maintain a gradual upward trend towards recovery. Overseas, we have seen the U.S. economy continue strong growth centering on consumer spending, an overall stable situation in Europe, and a continuation of Asia´s rapid economic resurgence.
In this economic environment, and based on OMRON´s management policy, OMRON considered the key objective of FY2000 as "Accelerating OMRON´s Corporate Transformation." Through this corporate transformation, OMRON has been striving to strengthen the company´s competitiveness and accelerate corporate reforms aiming to establish a foundation to achieve continuous profitability.
As well as OMRON´s corporate reforms, due to a dramatic increase in plant and equipment investment, mainly in the domestic semiconductor and IT related business sectors, the demand for OMRON Group mainstay control system related products (Industrial Automation Company and Electronic Components Company) has seen a remarkable increase. This in turn, despite the highly appreciated yen, has produced favorable results in both domestic and overseas sales. Net sales were Y271,591 million (an increase of 6%).
Regarding profit, due to an increase in net sales and a decrease in the ratio of cost of sales, net income before tax was Y14,995 million (an increase of 98%), despite negative elements caused by the appreciation of the yen. Net profit was Y8,221 million (an increase of 105%).
In terms of cash flow, Operating cash flow increased to Y16,797 million due to a net profit of Y8,221 million and a reduction in sales credit. Investment cash flow decreased to Y18,737 million due out going expenses caused by OMRON´s consolidation scrap and build plan, which in turn contributed to a slight loss in free cash flow. A reduction in financial cash flow to Y3,730 million was also seen through redemption of borrowings.

For net sales of individual internal companies, because of divisional restructuring among companies this year, last year´s results were recalculated in order to show a more realistic comparison.

Industrial Automation Company (IAB)

Due to a steady domestic recovery, an increase in plant and equipment investment in the semiconductor and IT related sectors, and good results appearing from strengthening policies for higher sales capability, OMRON´s IAB Company has seen a substantial increase in domestic sales compared to the same period last year. In overseas markets, because of increased export competitive strength due to the weak Euro, net sales in local currencies have increased dramatically. North America as well, has seen an increase in plant and equipment investment due to continued strong economic growth, and in Asia and China with the economy making a rapid recovery, large growth in sales has been achieved.
Despite exchange losses caused by the appreciation of the yen, the overall results for IAB Company were Y118,541 million (an increase of 14 %)

Electronic Components Company (ECB)

Domestically, due to an increased demand for IT systems such as cell phones and Internet related products, the electronic components sector, and in particular the semiconductor industry, has made a rapid recovery. Also, the switch and relay markets have seen favorable results from an increase in air conditioner production due to the intense heat and an increase in demand for electronic components in other general product sectors. Overseas, an increase in investment in the American telecommunications industry has led to strong demand for telecommunication relays used in telephone switchboards, etc. In Asia and China, primary ECB client industries such as household appliances and audiovisual equipment have achieved steady sales results. For the Automotive Electronic Components business, because of an increase in domestic car production, sales have been stable. Overseas, despite the cooling of demand in the UK, the American and Korean markets are showing good results. In line with this, ECB´s total net sales were Y57,594 million (an increase of 8%).

Social Systems Business Company (SSB)

The financial systems sector has seen restraint in new investments reflecting the severe operating environment in the banking sector. However, due to the need to respond to the introduction of new Y2000 notes and Y500 coins, and ATM replacement demand created from consolidation and mergers among financial institutions which was also evident in the consumer finance industry, more positive results have begun to be seen. Asia´s rapid economic recovery was also a contributing factor.
In the public transportation systems business, from the introduction of the "Pass Net," a convenient pre-paid card that allows rides over 20 railways with just one ticket, the demand for automatic pass gates saw a dramatic increase.
Also, orders from the JR group surpassed those of last year, which in turn contributed to an increase in overall sales. As a result, SSB´s total net sales were Y53,260 million (an increase of 9%)

Healthcare Company

Japan´s domestic consumer spending slump continued. In particular, spending on healthcare products cooled and a considerable decrease in sales occurred. The background for this seems to be that, influenced by the wave of the IT revolution, over-emphasis has been placed on spending for household IT equipment. Overseas, on the other hand, business results have steadily improved due to a continued flourishing economy in the U.S. and the economic recovery in Europe. With exchange losses as well, HCB´s net sales were Y18,152 million (a decrease of 12%)

Others

Net sales of other departments totaled Y24,044 million, a decrease of 19% from last fiscal year. Conditions for the main departments are explained below.
Based on its business plan to provide new outsourcing services, the Creative Service Company received positive appraisals from various corporations regarding their methods and know-how of consultation for head office restructuring.
In other main business areas, the computer peripheral division´s sales increased for cell phone modems and terminal adapters for ISDN. Print seal machine business continued to develop new hit products, and consumables also showed favorable results. Adversely, OMRON´s card business faced a difficult period influenced by the inventory adjustments of overseas sales companies.

Based on a management policy that places great importance on shareholders, OMRON is working towards increasing return on equity (ROE). For the mid-term OMRON will pay a dividend of Y6.50 per share.
On November 16th, 2000, the Board of Directors approved the repurchase of 6 million shares of OMRON common stock, par value Y50 per share, at a maximum cost of Y15.0 billion.

• (2) Forecast for FY2001
• [All units in millions of yen]