OMRON Introduces Global Cash Management Allocate cash flexibly to accelerate the cycle of social value creation

• June 13, 2023

OMRON Corporation (HQ: Shimogyo-ku, Kyoto; President and CEO: Junta Tsujinaga; hereinafter, “OMRON”) announced today that it has signed an agreement with MUFG Bank, Ltd. (Head Office: Chiyoda-ku, Tokyo; President & CEO: Junichi Hanzawa; hereinafter, “MUFG”) concerning the introduction of global cash management to commence globally integrated management of the OMRON Group’s funds.

“Global Cash Management” Operational Scheme

In April 2022, OMRON launched its new long-term vision, “Shaping the Future 2030 (SF2030).” Guided by this vision, we have identified three social issues that we should address, namely, “achievement of carbon neutrality,” “realization of a digital society,” and “extension of healthy life expectancies.” To solve these social issues, we are working to create social value through our business. Meanwhile, in order to maximize corporate value, we established a new cash allocation policy, which prioritizes investment in growth, and on this basis, we will enhance shareholder returns. Maximizing corporate value requires a constant cycle of “value creation and reinvestment,” and operating cash flow is critical to this cycle. We have decided to introduce global cash management as part of our efforts to build a function for proactively investing in growth.
OMRON maintains regional headquarters, which oversee our affiliates responsible for production, sales & marketing, development, or other functions in each geographical region. In the past, regional headquarters managed cash in a two-tiered structure, whereby they consolidated funds in an account of the affiliates under their umbrella. As our business grows increasingly global, however, it has become imperative to perform optimal treasury management on a global basis if we are to track the Group’s funds in a timely and efficient manner and use them efficiently.

With the introduction of global cash management, it is now possible to place funds previously distributed among four different accounts in the U.S., Europe, Southeast Asia, and Japan, under integrated management, allowing us to flexibly utilize them whenever and wherever needed. In more concrete terms, raising funds from any regional headquarters and transferring them to other regions in need of funds, which once took some time, is completed expediently. It also helps us track the funding situation at international Group companies, strengthen corporate governance via efficient cash management, and appropriately respond to geopolitical risks.

Going forward, OMRON will further increase efficiency in financial operations as we manage financial risks en bloc by way of stable operation of the scheme, management of cash on a global scale, and integrating financing functions, thus creating social value through business and contributing to the development of society.

■ Overview of global cash management

Agreement signed on	June 1, 2023
Agreement signed with	MUFG Bank, Ltd. (Contact: Kyoto Branch)
Number of regional HQs covered	Four: Kyoto (Japan); Chicago (U.S.); Amsterdam (Europe); Singapore (Southeast Asia)

■ Reference
About global cash management

• Global cash management means a system that automatically transfers funds among Group companies according to certain rules for integrated cash management by consolidating bank accounts worldwide. In financial terms, such a framework is referred to as global pooling or cash pooling.
• Enables smoothing of excesses and deficiencies of funds among Group companies. For example, when a subsidiary has run short of funds, the Headquarters in Japan may arrange financing for them.
• The pooling system automatically siphons surplus capital and replenishes cash deficiency.

General advantages of introducing the pooling system

• Lower financial cost (interest expenses on borrowing by subsidiaries)
• Greater operational efficiency for subsidiaries (business specialization, higher productivity)
• Consolidating financial functions
• Enhanced governance of Group companies involved in terms of financing/funding

About OMRON’s long-term vision
Shaping the Future 2030 (SF2030)
https://www.omron.com/global/en/sf2030/

About OMRON Corporation
OMRON Corporation is a leading automation company with its core competencies in Sensing & Control + Think technology, and is engaged in a wide range of businesses including industrial automation, healthcare, social systems, and device & module solutions. Established in 1933, OMRON has about 30,000 employees worldwide, working to provide products and services in around 120 countries and regions. For more information, please visit https://www.omron.com/global/en/