OMRON Corporation today announced its consolidated operating results for fiscal 2018 ended March 31, 2019. It also gave guidance for the fiscal 2019 forecast.

Net sales for fiscal 2018 fell 0.1%, to ¥859.5 billion. Gross profit decreased 1.0%, to ¥354.1 billion. Operating income was down 11.2%, to ¥76.6 billion. Net income attributable to shareholders dropped 14.0%, to ¥54.3 billion. The sales decline reflected slower demand relating to smartphones and semiconductors, as well as deteriorating sentiment among manufacturers that spread globally in the second half of the year, leading to revenue downturns in the core Industrial Automation Business (IAB) and Electronic and Mechanical Components Business (EMC). In contrast, sales of Social Systems, Solutions and Service Business (SSB) rose on demand for updated offerings, notably in train station systems. Healthcare Business (HCB) sales advanced as a result of robust global demand for blood pressure monitors and stronger sales promotions through online channels.

With the contributions from SSB and HCB, net sales remained basically unchanged. Operating income was down from a year earlier owing to a strategic boost in marketing and development expenditure to drive future growth.

For fiscal 2019, OMRON forecasts a 3.4% decrease in net sales, to ¥830 billion, with gross profit declining 1.4%, to ¥349 billion. Operating income is expected to decrease 15.2%, to ¥65 billion, while net income attributable to shareholders is forecast to fall 21.8%, to ¥42.5 billion.

Management expects sales in SSB and HCB to increase on the back of robust demand. Sales in IAB and EMC are expected to decline on lackluster demand amid an uncertain business climate. Macroeconomic factors, such as trade friction between the United States and China, Brexit, and a high yen have contributed to the uncertain business climate. OMRON's forecast accordingly reflects the fluctuation risks that could detract from net sales by as much as ¥10 billion and from operating income by as much as ¥5 billion.

In the core IAB, investments in the automotive industry are expected to remain solid owing to capital investment demand for automated driving technology and electric vehicles. Another factor pointing to buoyant investment is increased demand for labor savings and increased interest in the Internet of Things. Among digital players, capital investment demand is expected to be at a particularly low ebb, driving sales down. In HCB, OMRON looks to rising sales amid the rise in aging populations worldwide, as demand remains buoyant for secondary prevention against lifestyle diseases, further boosted by the expansion of online channel businesses.

Management plans to retain dividends per share for fiscal 2019 at ¥84, unchanged from a year earlier.

Yoshihito Yamada, President and CEO, commented, "The business climate in fiscal 2019 is expected to remain unfavorable. While the outlook for the near term remains unclear, growth trends remain unchanged in terms of the medium and long term due to the needs from automation investments reflected in the Industrial Automation Business and increasing healthcare needs for the Healthcare Business." Mr. Yamada added, "To date, we have anticipated growth over the medium and long term, and have become steadily more competitive by investing intensively in our Industrial Automation and Healthcare businesses. In our view, the changing business climate presents opportunities. We will step up efforts to carefully invest in growth and will strive to enhance our corporate value over the medium and long terms."