In fiscal 2024, we established the companywide policy of “All for Creating Customer Value: Focus all actions on creating value for customers and restructure the foundation for earnings and growth.” Guided by this principle, we focused our resources on initiatives that generate customer value, thereby improving investment efficiency. At the same time, we worked on rebuilding performance emphasizing sales while also restructuring the foundation for earnings and growth.

In terms of rebuilding performance emphasizing sales, we devoted the entire company’s efforts to maximizing sales through a customer-driven approach. For example, in the Industrial Automation Business (IAB), we steadily reinforced our business foundation while developing and launching new products. These initiatives allowed us to capture the gradual market recovery in the second half of the fiscal year. As a result, IAB achieved a recovery in sales and a significant increase in operating income, driving overall company financial performance. Over the course of this fiscal year, we established a clear path to revitalize IAB and achieved profit growth in terms of companywide financial performance.

With respect to restructuring of the foundation for earnings and growth, we advanced the four management measures set forth in the Structural Reform Program NEXT 2025, which was launched in April 2024, as planned and without delay. For instance, under the initiative of “fixed cost productivity improvement,” we realized approximately JPY 26.0 billion in fixed cost reductions during fiscal 2024 alone, ensuring achievement of the JPY 30.0 billion reduction target by fiscal 2025. The initiative of “headcount and capacity optimization” was fully completed by the end of fiscal 2024. Preparations for “portfolio optimization” and the “introduction and operation of customer-driven management system” progressed according to plan, setting the stage for delivering results from fiscal 2025 onward. As CEO, I am convinced that we have successfully restored the company’s earning power through these efforts, and I am more confident than ever in our ability to return to a growth trajectory.

* Fiscal 2024 companywide financial performance (including NEXT 2025 financial performance)

* STRATEGY & BUSINESS

In advancing these initiatives, my greatest focus has been on one point, “how much we can shift our activities toward the customer, and how we can sustain this change.” Over the past year and a half, as CEO, I have devoted myself to this simple principle, taking the lead in transforming the mindset and actions of all employees.

For example, to promote employees’ correct understanding and acceptance of the purpose and significance of the policy of “emphasizing sales through a customer-driven approach,” we have strengthened dialogue between the executive team and employees since the very beginning of our structural reforms. I personally held 65 small-group meetings during fiscal 2024, where employees volunteered to participate from each department. In total, I had in-depth, direct discussions with a total of approximately 430 employees. In addition, through our internal social media, messages I posted attracted many questions and opinions from employees worldwide. I read every comment, and in principle, ensured that either I or the executive member in charge responded directly within the same day.

At the same time, we thoroughly reviewed our internal business processes through a customer-driven approach. Specifically, we reduced internal reporting tasks, preparation, and meetings that do not directly contribute to creating value for customers. We also reviewed reporting lines and authority regulations at the management level to accelerate decision-making on the front lines. Furthermore, we advanced digital transformation, including the use of generative AI, to improve efficiency and automation and drive changes in the way we work.

Through these efforts, I feel tangible progress in employees’ understanding of a customer-driven approach and in their proactive actions with this principle in mind. A change in mindset and behavior is beginning to take root. At the same time, there is no end to initiatives aimed at improving business processes and reforming corporate culture based on a customer-driven approach. I will continue engaging in direct dialogue with employees. Looking ahead, we remain firmly committed to expanding sales, which represent the value received from customers, while leading the way in driving customer-driven process improvements and organizational cultural transformation.

* PEOPLE

Building on the achievements and challenges of fiscal 2024, including progress under NEXT 2025, we have established our companywide policy for fiscal 2025 as, “All for Creating Customer Value: Identify changes in demand and take agile action to maximize sales.” This policy reflects our unwavering commitment to remain thoroughly focused on engaging with customers and driving sales growth throughout fiscal 2025.

For the full year of fiscal 2025, the companywide consolidated outlook incorporates a range of downside risks stemming from uncertainties in U.S. tariff policies and their impact on the market. Specifically, we project net sales of JPY 835.0–820.0 billion, operating income of JPY 65.0–56.0 billion, and net income of JPY 35.5–29.0 billion. As of the first-quarter earnings announcement in August 2025, we estimate the annual cost impact of tariffs on our business at JPY 11.5 billion. While our plan aims to fully offset this impact through price adjustments, we have factored in two key downside risks: potential demand fluctuations exceeding expectations due to tariff impacts (sales impact: JPY -15.0 billion; profit impact: JPY -5.0 billion), and the risk of not fully offsetting the cost burden through price adjustments within fiscal 2025 (profit impact: JPY -4.0 billion). Even in the event these risks materialize, we will strive to achieve both higher sales and higher profits.

The Industrial Automation Business (IAB), which has laid the foundation for growth, will remain the primary driver of companywide performance. In fiscal 2025, IAB will focus particularly on capturing recovering demand, including robust semiconductor investments centered in Greater China and Korea, as well as equipment investments by leading Chinese manufacturers in the secondary battery industry both domestically and overseas. At the same time, by strengthening collaboration with distributors to further solidify our customer base, we aim to expand business opportunities. IAB already achieved year-on-year increases in both sales and profit in the first quarter, delivering results above plan and making a strong start to the year.

Meanwhile, the Healthcare Business (HCB) continues to be affected by the challenging market environment in China, particularly in its core blood pressure monitor business. However, we will work to offset HCB’s weakness at the Group level to ensure achievement of companywide targets. To this end, the whole company remains committed to a customer-driven approach, continuing to pursue sales maximization and thereby achieving our operating income targets.

* FY2025 Plan

The growth story we envision beyond structural reforms remains unchanged: it is grounded in the basic strategies outlined in our long-term vision, “SF2030.” OMRON will continue to address three social issues, namely, “achievement of carbon neutrality,” “realization of a digital society,” and “extension of healthy life expectancy.” These challenges will be tackled through our business operations to drive continuous growth. To achieve this vision, we will leverage our competitive advantage in “robust products (hardware)” and, at the same time, expand solutions and services (products + services) that utilize the data generated by this hardware. These two pillars will serve as our growth drivers, ensuring a clear path toward enhancing corporate value into 2030. OMRON, as represented by HCB’s blood pressure monitors and SSB’s storage systems, has globally deployed groups of products (hardware) with overwhelming competitive superiority and top market share in the business domains we address. These customer assets amount to, for example, approximately 200,000 companies worldwide in IAB, and in HCB, more than 20 million blood pressure monitors delivered to users worldwide annually. These hardware products generate enormous volumes of data at sites worldwide every day, and linking the on-site data generated by our own products to solutions is a business model unique to OMRON.

In fiscal 2025, based on OMRON’s strength in “Sensing & Control + Think” technologies, we will bring to market competitive products (hardware).” For example, in IAB, we will invest a record amount in R&D, increasing it by JPY 5.0 billion year on year, in fiscal 2025, and in the three years between fiscal 2024 and fiscal 2026, we will launch 42 new products (11 launched in fiscal 2024, 22 planned for fiscal 2025, and nine planned for fiscal 2026). In fiscal 2025, we plan to launch a wide range of products responding to customer needs, such as groups of controllers that realize the advancement of production lines and equipment and the visualization/IoT of on-site information, and groups of sensors that realize improved inspection accuracy. In HCB, for blood pressure monitors, which form the foundation of earnings, we will launch new models equipped with a proprietary next-generation algorithm capable of detecting the possibility of atrial fibrillation, promoting global adoption. For ECGs, we will strengthen the lineup of portable ECGs and blood pressure monitors with ECG, accelerating the creation of new growth areas following blood pressure monitors. In SSB, we will further solidify our position as a domestic market leader in storage systems by launching new storage systems equipped with functions that can flexibly respond to user needs and living environments.

At the same time, toward strengthening future products, we will invest in companywide common technology development. Specifically, in October 2025 we will establish the “Power Electronics Center ” in Katsuragawa, Kyoto, to strengthen power electronics technology, which broadly supports solutions to the three social issues set forth in SF2030, such as power conditioners and energy storage systems (SSB) used in solar power generation, and power supplies and servo drives (IAB) that are essential in factory automation. At this Center, from R&D to product development for social implementation, we plan to conduct activities consistently and across business domains, focusing on the utilization of next-generation devices that contribute to miniaturization and higher efficiency of power electronics equipment, and the development of energy control technology for the adoption of renewable energy. In the power electronics domain, in addition to establishing this Center, we will make additional investments of approximately JPY 5.0 billion over the three years from fiscal 2025, as well as hire about 100 engineers, thereby strengthening hardware through improved technology development capabilities. And by 2030, we aim to achieve sales of JPY 200.0 billion in related businesses.

We will also take on new challenges in the products + services business. For example, in IAB, by utilizing the business assets we have cultivated since launching the solutions business in 2016, we aim to establish further competitive superiority. Our initiatives include efforts to fully advance the construction of advanced digital twin environments in production sites through our technology partnership with NVIDIA Corporation , and the creation of data solutions through a strategic partnership with Cognizant. In HCB, we are globally promoting health solutions utilizing daily vital data recorded through the OMRON connect smartphone app, and in collaboration with Luscii Healthtech B.V., a Dutch company we made a wholly owned subsidiary in April 2024, we are focusing efforts on strengthening our remote patient monitoring service.

The key to accelerating the shift to the products + services business lies in co-creation with JMDC Inc. Since JMDC Inc. joined the OMRON Group in October 2023, co-creation between JMDC Inc. and OMRON’s existing businesses has steadily evolved. At present, in the healthcare field, we are working on Proactive health solutions and Corporate health solutions. In Proactive health solutions, since August 2024, we have begun linking home-use data from HCB devices with medical data held by JMDC Inc., aiming to prevent the onset of serious diseases including cerebrovascular and cardiovascular diseases. Since entering fiscal 2025, the number of linked users has reached 160% of the previous fiscal year-end, and in just one year, a large volume of data has been connected with personal IDs, accelerating algorithm development to predict the risk of disease onset. In Corporate health solutions, based on the Health & Productivity Management Alliance, which since its launch in June 2023 has expanded to approximately 500 corporate and organizational members in total, we are working to create data-driven business opportunities. Examples have already been provided to member companies, such as cases where OMRON has used lifestyle disease risk data for employees analyzed by JMDC Inc., and in the case of one member company, a concept is being advanced in which blood pressure monitors from OMRON are distributed to executive employees, and JMDC’s data analysis manages individual health risks, linking to appropriate health management. Going forward, for members of the Health & Productivity Management Alliance, we plan to provide health management services based on proprietary OMRON Group data combined with medical professional services (occupational physicians, public health nurses) provided by iCARE Co., Ltd., which joined the OMRON Group in October 2025, thereby accelerating the social implementation of health management through this Alliance.

Even outside the healthcare domain, our co-creation efforts are bearing fruit. In the social systems domain, in the implementation of the smart management and service solutions (M&S) business, centered on digital transformation of maintenance and engineering services aimed at resolving the social issue of labor shortages in the distribution and retail industries, multiple proof-of-concept projects (PoC) began from fiscal 2024 on several themes and are progressing smoothly. Furthermore, we launched a business to support the realization of carbon neutrality in manufacturing sites, utilizing JMDC Inc.’s data management and solution development capabilities, and have begun data analysis and feedback to extract customer on-site issues and propose solutions. Negotiations worth JPY 4.0 billion across 20 projects are already in progress, leading to a steady accumulation of results in improving customers’ energy productivity.

In this way, results of co-creation with JMDC have been steadily building up at an accelerating pace, and we are gaining increasing confidence in achieving our goal of creating a data solution business with net sales exceeding JPY 100.0 billion and an operating income margin of over 12% by fiscal 2027.

* STRATEGY & BUSINESS

* INNOVATION & TECHNOLOGY

By welcoming JMDC Inc. into the OMRON Group in this way, our capabilities in database construction, data analysis, and solution development, all essential for the Data Solution Business, have been steadily strengthened within the Group. Recognizing the challenge that, in order to carry out data solution development led by JMDC Inc. within the Group with even greater speed and agility, it is necessary to both strengthen OMRON’s system engineering capabilities and utilize those functions from a companywide management perspective, we newly established OMRON DIGITAL Co., Ltd. (ODC) on October 1, 2025, as an organization under the direct control of the President. ODC is a reorganized body based on OMRON SOFTWARE Co., Ltd. (OSK) , which was previously responsible for software development under SSB. Since its founding approximately 50 years ago, OSK has borne responsibility for software development within the OMRON Group and has acquired extensive capabilities in product-embedded development. Going forward, ODC will, by developing OSK’s organizational capabilities, take on the function of promoting and supervising across the company the system engineering necessary for data solution development.

Furthermore, as part of our efforts to evolve the OMRON Group’s overall business portfolio into one addressing growth fields with high affinity to data solutions, we announced on September 19, 2025, that we had begun considering spinning off the Device & Module Solutions Business (DMB) with a target date of April 1, 2026.

Since its founding, DMB’s core products have been electronic components such as relays, switches, and connectors. By leveraging quality as its strength, it has earned customer trust and for many years supported OMRON’s growth. In recent years, while market growth is expected in areas such as expanding demand for high-capacity relays for EVs, the competitive environment has become increasingly challenging due to the entry of emerging companies possessing business speed and cost competitiveness. In such a business environment, in order to establish sustainable and highly profitable growth, it is crucial to build optimal business processes and decision-making processes while maintaining DMB’s strength in quality, and to further strengthen business speed and cost competitiveness. Moreover, for the development and production of new products and the strengthening of the global sales system, further expansion of investment is required beyond previous levels, and in implementing this, it will be necessary to consider a wide range of partnership possibilities, including co-creation with other companies and utilization of external resources.

In order to steadily execute these initiatives and establish a foundation for earnings and growth of the business, we have determined that the most effective way is to establish an autonomous management structure, and thus decided to explore spinning-off of DMB. Going forward, we will advance the identification of issues and the study of options by region in preparation for the spin-off, with the aim of completing the spin-off by April 1, 2026. This spin-off represents an important step for moving our business to the next stage and connecting it to further growth of the Group as a whole.

We are fully aware of the concern we are causing our shareholders with regard to the current trend in OMRON’s share price. While the capital market’s view of OMRON at present recognizes that profitability has greatly improved through structural reforms, we believe that a lingering lack of sufficient confidence regarding our future growth is influencing the current valuation. First, we will thoroughly refine our competitive products, and by combining those products with services generated through data solutions as a new business model and using this as the driver of growth, we will ensure our path to enhancing corporate value into 2030.

In order to successfully implement this counteroffensive phase, it is vital to establish a corporate culture in which all of us, from management to employees, consistently engage with customers with the entrepreneurial spirit that has defined us since our founding, and thoroughly commit to sales and profits from a customer-driven approach. Now that we have carried through with structural reforms, by returning to OMRON’s purpose, we will accomplish the transformation into a company that is recognized as growing robustly through addressing social issues. We will continue to advance as a united team to meet the expectations of shareholders, and we ask for your continued support.