OMRON announces long term vision “Shaping the Future 2030”
-Targets 930 billion yen net sales and 120.0 billion yen operating profit in the 1st phase (FY 24)

• Mar 09, 2022

OMRON Corporation (HQ: Shimogyo-Ku, Kyoto. President and CEO: Yoshihito Yamada) has announced its new long-term vision for fiscal 2030, and the three-year medium-term management plan in a virtual press conference held today. With an objective to strengthen the pace & expanse of worldwide sustainable development, the vision strives to solve more & diverse social issues through OMRON's Sensing & Control + think technologies, as explained by its President and CEO Yoshihito Yamada.

Named as “Shaping the Future 2030 (SF2030)”, the vision is an extension of the organization's renowned corporate principles-based management philosophy that underscores OMRON's sincere desire to shape a sustainable society through continuous creation of social as well as corporate value via integration of business growth and sustainability.

Keeping in sync with the dynamic nature of the socio-economic environment, over the last 89 years of its inception (since 1933), OMRON has been flourishing and sustaining its growth by living up to its vision of contributing towards creation of a better society via solving social issues through industrial automation, healthcare and social systems solutions.

Envisioning that the upcoming decade is going to indicate the advent of 'autonomous society' ^[1] and unfold many more diverse & complex social issues, OMRON's long term vision, SF2030 enumerates the ways to maximize human capabilities through people-oriented automation technologies. This encompasses creation of more harmonious & stronger relationships between humans and machines. The company believes that this harmony is the key to bring out the best in people helping them to solve issues and lead more fulfilling and better lives. This will in turn drive the company create newer corporate and social values enabling it to sustain & strengthen its purpose of existence.

“Though we have been able to bolster our profitability, our responsive to change, implementation of sustainability management and our corporate value through reinforced corporate governance and risk management, the socioeconomic system remains dynamic and continues to undergo major changes. We aim to create a strong autonomous growth model and further evolve our corporate management to ensure a sustainable business growth,” says Mr Yoshihito Yamada, President and CEO, OMRON Corporation.

Recognizing the imminent transition in the economic systems - from mass consumption & production to pursuit of global sustainability as one of the major transformations in the Autonomous society, Mr Yamada further explains, “The transition will be accompanied with disruptions in the social systems led by many factors such as climate change, aging population, and growing economic disparity among individuals to name just a few. This scenario will give rise to new and complex social issues which will need newer tech-enabled and sustainable solutions. And this is where we aim to enhance our contribution. If we do so, we will not only create more social value but will also maximize our corporate value automatically.”

The three social issues that OMRON has identified as relevant opportunities and aims to address through its businesses in SF2030 are achievement of carbon neutrality, realization of a digital society, and extension of healthy life expectancies.

The company aims to clock in net sales of 930.0 billion yen and operating profit of 120.0 billion yen (FY2022-FY2024) - the 1st phase of SF2030 three-year medium-term management plan - by pursuing the following business directions for the identified social issues:

• Industrial automation: The business will catalyze advancement of manufacturing that is well prepared to support a sustainable society. Continuing with its focus on easing labor shortages, and enhancing productivity in various industries, OMRON will evolve its innovative-Automation approach with the aim of building a production floor that shapes a sustainable future where both harmony with the global environment and worker satisfaction are achieved.
• Healthcare : Buoyed with the great progress of its ongoing "Zero Events" direction (the efforts to reduce events of cardiovascular disease to zero) OMRON will intensify its focus in preventive & remote healthcare monitoring domain while continuing to advocate the adoption of home-use medical devices and data-based hypertension management ensuring more accessible healthcare and healthier lives for people across the globe.
• Social Solutions : Contributing to the adoption and efficient use of renewable energy, OMRON will help to create a sustainable infrastructure to support the digital sustenance of the upcoming autonomous society. OMRON will use its advanced energy control technology for energy harvesting, conservation & optimization.
• Device & module solution domain: OMRON will make more contributions to the spread of new energy and high-speed communication via enabling the creation of sturdier, advanced, and more efficient devices making lives of people easier and better.

Along with financial milestones, the company has also enlisted 10+1 non-financial targets as part of its management goal. These non-financial targets have a relevant connect with many Sustainable Development Goals (SDGs) & needs of local communities underlining the alignment of the company's commitment to society.

In order to support these ambitious directions, OMRON aims to bring in strong transformations in its corporate management and organizational capabilities too. Here is a low-down of the key initiatives :

• Making a shift from product to essential value perspective : The organization is going to work towards shifting its perspective from just creating performance and quality-based value to creating essential value that will provide users much more proposition than solving just immediate operational issues. It will help them to be a part of the development of the solutions answering larger social and industrial issues.
• Evolution of business models : The company aims to upscale the expanse of its collaborations and networking with like-minded organizations, and business associates to come up with better & newer solutions.
• More attention towards "diversity & inclusion" : Believing that its human resources are the key to bringing SF2030 to success, this includes investment in talent development, and nurturing a psychologically safe and inclusive organizational work culture encouraging diverse individuals to manifest their talents, and abilities to create innovations.
• Improving supply chain resilience: to help endure rapid changes in the business environment, such as natural disasters and geopolitical risks. It also includes endeavors to increase operational efficiency, improvement in design development prowess and decentralization of production sites.
• Strengthening sustainability initiatives : To make businesses achieve carbon neutrality, reduce their environmental impact via targeted greenhouse gas emission reduction, and respect human rights on a global scale. By prioritizing these mandates, OMRON will not only fulfill its corporate social responsibilities, but also sharpen its competitive edge by adding “environmental & human value”.
• Accelerating "data-driven corporate operations through DX” : to support business transformation and empower its people with a robust, safe, and progressive workstyle based on digitalization.

“With SF2030, our aim is to shape a better society and while doing so become a corporate group that people can always depend on. An organization that continues to live up to the high expectations of people from around the world,” sums up Mr Yamada.

[1] : According to the SINIC theory, conceptualized by OMRON's founder Kazuma Tateisi, the Optimization Society - the final phase of the Industrialized Society - began in 2005, following on from the Information Society, and this will subsequently shift to the Autonomous Society by 2025. The Autonomous society will be characterized by human desires aiming to realize abundant lives and self-fulfillment based on harmonious relationship between people and machines. Read more here

<Shaping the Future 2030 (SF2030) Vision>

“Innovation Driven by Social Needs through Automation to Empower People”

<Overview of the three-year Medium-Term Management Plan, SF 1st Stage (FY2022- FY2024)>

• 1) Group Policy : An attempt at value creation by accelerating transformation

• 2) Group strategies :

  i) Business transformation
  
  • volution of the four core businesses: Industrial Automation Business (IAB), Healthcare Business (HCB), Social Systems, Solutions and Service Business (SSB), and Electronic and Mechanical Components Business (EMC)
  • Expansion of the service business utilizing customer assets
  • Creation of new social issue-based businesses
  ii) Transformation of corporate management and organizational capabilities
  
  • Acceleration of diversity & inclusion
  • Data-driven corporate management through DX
  • Improvement of supply chain resilience
  iii) Strengthening of sustainability initiatives
  
  • Reduction of greenhouse gas (GHG) emissions for de-carbonization and lower environmental impact
  • Instillment of respect for human rights globally

• 3) Evolution of the Four Core Businesses (Focus Businesses)

  • IAB: Digital, environmental mobility (NEV), food & daily necessities, medical, and logistics
  • HCB: Cardiovascular, respiratory, pain management, and remote patient monitoring services
  • SSB: Energy (housing, industry), management & services
  • EMC: Products for DC-powered equipment and high-frequency equipment

• 4) Management Targets (Financial)

Overall	FY2021 Forecasts*1	FY2024 Targets*2
Net Sales	760.0 billion yen	930.0 billion yen
Operating Income	88.0 billion yen	120.0 billion yen
Operating C/F, 3-year total	217.9 billion yen*3	250.0 billion yen
ROIC	More than 9%	More than 10%
ROE	More than 9%	More than 10%
EPS	284 yen	More than 400 yen

By Business Segment	FY2021 Forecasts*1	FY2024 Targets*2
IAB	Net sales: 430.0 billion yen Operating income: 79.0 billion yen (OP margin) (18.4％)	Net sales: 530.0 billion yen Operating income: 106.0 billion yen (OP margin) (20.0％)
HCB	Net sales: 134.0 billion yen Operating income: 19.5 billion yen (OP margin) (14.6％)	Net sales: 180.0 billion yen Operating income: 28.0 billion yen (OP margin) (15.6％)
SSB	Net sales: 90.0 billion yen Operating income: 6.5 billion yen (OP margin) (7.2％)	Net sales: 100.0 billion yen Operating income: 10.0 billion yen (OP margin) (10.0％)
EMC	Net sales: 103.0 billion yen Operating income: 8.0 billion yen (OP margin) (7.8％)	Net sales: 110.0 billion yen Operating income: 11.0 billion yen (OP margin) (10.0％)

*1 As announced with Q3/FY2021 earnings results
*2 Forex assumptions: 1USD = 113 JPY, 1EUR = 130 JPY, 1RMB = 17.8 JPY
*3 Excluding impact of the transfer of the Automotive Electronics Components Business

5) Initiatives to Achieve De-Carbonization and Lower Environmental Impact

Key Initiatives	FY2024 Targets
Reducing GHG*1emissions from Company （Scope1・2)	To achieve “Carbon Zero” by 2050, reduce total GHG emissions by 53% from the base year of FY2016 by FY2024. To achieve this goal, we will work to expand energy conservation and energy creation and achieve Carbon Zero at all 76 sites in Japan*2.
Reducing GHG emissions from use of products that Company sold （Scope3, Category 11）	In order to achieve the FY2030 target of a 18% reduction (compared to FY2016), we implement energy-saving designs for new products in each business at 1st Stage. At the same time, during the 1st Stage period, a scenario will be formulated to achieve the FY2030 target*3.

*1 GHG＝Greenhouse Gas
*2 GHG emissions from in-house power consumption at 13 production sites and 63 non-production sites (HQ, R&D, sales) are covered
*3 Scope 3 targets for 2050 have not yet been determined. It will be formulated after further verification and examination

6) Management Targets (Non-Financial)

FY2024 Targets
1) Increase "sustainability-related sales”*1, an indicator of contributions to the resolution of the three social issues, by 45% vs. FY2021
2) Increase the ratio of women in managerial roles to 18% or higher (globally)
3) Realize employment of persons with disabilities at 28 overseas sites and maintain the ratio of employees with disabilities at 3% in Japan
4) Reduce Scopes 1 and 2 GHG emissions by 53% vs. FY2016
5) Achieve Carbon Zero*2 at all 76 sites*3 in Japan
6) Conduct human rights due diligence in line with the relevant UNGP*4 and build a human rights redress mechanism into the value chain
7) Continue implementing sustainability initiatives steadily to maintain our listing in the Dow Jones Sustainability™ World Index (DJSI World)
8) 9) 10) Group targets to be determined by vote by global employees
+1 A top manager from each region declares their commitment to their host community in accordance with the OMRON Sustainability Policy

*1 Sales from focus businesses that contribute to "Achievement of carbon neutrality", "Realization of a digital society", and "Extension of healthy life expectancies"
*2 GHG emitted from the use of electric power by OMRON (Scope 2)
*3 13 production sites and 63 non-production sites (HQ, R&D, sales)
*4 The UN Guiding Principles on Business and Human Rights

7) Strategic Targets

FY2024 Targets
IAB	- Customers adopting the innovative-Automation concept: 5,000 accounts (+100% vs. FY2021)
HCB	- Blood pressure monitor unit sales: 94 million units (globally) (3-year total) - Users of remote patient monitoring services: 600,000 persons (Cumulative)
SSB	- Energy management equipment connected: 50,000 units (3-year total)
EMC	- Unit sales of products contributing to the spread of new energy and high-speed communication For DC-powered equipment: 60 million units For high-frequency equipment: 170 million units (3-year total)
Expansion of service business utilizing customer assets	- Ratio of service business sales to total sales: over 10%
Creation of new businesses	- New businesses created: 3 businesses or more
Diversity & Inclusion	- Personal creativity:*1 +7% (vs. FY2021) - Investment in human resource development: 6.0 billion yen (3-year total) - VOICE SEI:*2 70P or higher
Enhancement of earnings power	- Gross profit margin: over 47%

*1 Amount of added value per unit of labor cost (production, SG&A, development)
*2 Sustainable Engagement Index, OMRON's employee engagement survey

About OMRON
OMRON Corporation, as a leading company in the field of automation, which features its unique “Sensing & Control + Think” core technology, is engaged in a broad spectrum of businesses, including control equipment, electronic components, social systems, and healthcare. Founded in 1933, OMRON Corporation currently employs approximately 30,000 people and provides products and services in around 120 countries and regions around the world. For more details, please go to: https://www.omron.com/global/en/