OMRON Corporation today announced its consolidated operating results for the first half of fiscal 2018, ended September 30, 2018.

Net sales increased 1.4%, to ¥416.2 billion, and gross profit advanced 2.1%, to ¥173.8 billion on continuous growth in the core Industrial Automation and Healthcare Businesses. Although the business climate has deteriorated due to intensifying trade friction, a slow-down in the semiconductor industry, and the impact of natural disasters in Japan, both figures were record first-half highs.

Operating income dropped 16.0%, to ¥36.6 billion, while net income attributable to shareholders declined 12.8%, to ¥26.4 billion. These decreases reflected increases in strategic spending, notably to increase sales engineers in prospective core businesses, increase development investments in the core businesses of tomorrow, and conduct structural reform.

Sales in the Industrial Automation Business rose 4.1%, to ¥201.5 billion, against a backdrop of expanding worldwide demand for labor savings through Factory Automation. OMRON anticipates growth from companies in the automotive, digital, food and commodities, and social infrastructure arenas due to the steady adaptation of Innovative-Automation, OMRON's strategic concept for driving innovation at manufacturing sites.

Demand was up particularly in the automotive sector for advanced technology development and investments in state-of-the-art manufacturing. Robotics demand was solid amid a rising need for labor savings, principally in the food sector.

The Healthcare Business also was a driver of company-wide growth. Sales climbed 8.5%, to ¥55.5 billion on the strength of the Company's leading share of the global blood pressure monitor sales market. This business has benefited from rising health consciousness in ageing populations around the world and life style changes, especially in emerging countries. OMRON is now launching a campaign "Going for Zero", aiming at zero heart attacks and zero strokes. A key to the growth in this segment has been marketing, especially through strengthening online channels in China, Japan and US.

Management has lowered its full-year forecasts as it expects the operating environment to deteriorate further in the third quarter and beyond. It now looks for net sales to increase 2.3%, to ¥880.0 billion, with gross profit gaining 2.7%, to ¥367.5 billion, all be record highs. Operating profit is expected to decrease 3.8%, to ¥83.0 billion, and net income attributable to shareholders is anticipated to be down 7.4%, to ¥58.5 billion, reflecting ongoing strategic investments in our core businesses of tomorrow. Management projects cash dividends of ¥84.00 per share for the year, down from ¥92.00 in the previous term.

For the Industrial Automation Business, management forecasts a rise in sales of 3.9% for the full year, to a new high of ¥411.5 billion. This improvement stems from accelerating adoption of Innovative-Automation and creating applications that resolve customer issues, notably by further evolving flexible conveyance systems to free people from heavy tasks. Growth is also expected to come from focusing to deliver optimal customer solutions through an expanded product line, efforts to bolster the sales force and the opening of more offices/sites.

The full-year sales forecast for the Healthcare Business is for an 8.3% increase, to a record ¥117.5 billion. Strengthening sales of high-value-added products and online channel sales in view of a rising health consciousness trend worldwide will lead this growth. For example, the American Heart Association is revising its guidelines to lower the definition of high blood pressure, increasing the number of people with such an issue, which is expected to lead to higher monitor demand.

Yoshihito Yamada, president and CEO, commented, "Steady gains in the core Industrial Automation and Healthcare businesses drove companywide progress in the first half of the year. We delivered our best ever first-half net sales and gross profit performances by tackling the challenges of increasing market uncertainty amid intensifying trade issues and delivering new value to marketplaces. We see further opportunities for OMRON's core Factory Automation and Healthcare business areas due to the tightening of labor markets and aging populations, which will require further innovation in the workplace. We will keep close tabs on market climates, in order to realize growth over the medium and long-term by leveraging gross profit increases to boost investment in future expansion."

Financial Highlights

(Billions of yen)
	First half of fiscal 2017	First half of fiscal 2018	Change
Net sales	410.5	416.2	1.4%
Gross profit (Gross profit margin)	170.3 (41.5%)	173.8 (41.8%)	2.1% (0.3 percentage point)
Operating income (Operating income margin)	43.5 (10.6%)	36.6 (8.8%)	-16.0% (-1.8 percentage point)
Net income attributable to shareholders	30.3	26.4	-12.8%
Yen to U.S. dollar rate Yen to euro rate	111.2 125.6	109.5 129.5	-1.7 3.9

Note: The Company has applied the Financial Accounting Standards Board's Accounting Standards Update No. 2017-07, Compensation--Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post Retirement Benefit Cost.

Fiscal 2018 Forecasts

(Billions of yen)
	Fiscal 2017	Fiscal 2018 forecasts	Change
Net sales	860.0	880.0	2.3%
Gross profit (Gross profit margin)	357.8 (41.6%)	367.5 (41.8%)	2.7% (0.2 percentage point)
Operating income (Operating income margin)	86.3 (10.0%)	83.0 (9.4%)	-3.8% (-0.6 percentage point)
Net income attributable to shareholders	63.2	58.5	-7.4%
Yen to U.S. dollar rate Yen to euro rate	111.2 129.4	109.7 128.3	-1.5 -1.1

Note: The Company has applied the Financial Accounting Standards Board's Accounting Standards Update No. 2017-07, Compensation--Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post Retirement Benefit Cost.

About OMRON Corporation

OMRON Corporation is a global leader in the field of automation based on its core technology of "Sensing & Control + Think." OMRON's business fields cover a broad spectrum, ranging from industrial automation and electronic components to automotive electronic components, social infrastructure systems, healthcare, and environmental solutions. Established in 1933, OMRON has about 36,000 employees worldwide, working to provide products and services in 117 countries and regions. For more information, visit OMRON's website: https://www.omron.com/.

Contact (media):: Brand Communications Department
OMRON Corporation
Tel: +81-75-344-7175

OMRON's First-Half Net Sales Rise 1.4%, to Record ¥416.2 billion, driven, again by Steady Gains in Industrial Automation and Healthcare Businesses