OMRON Corporation: Summary of Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2023 (U.S. GAAP)

Kyoto (pta008/30.01.2023/09:40 UTC+1)

Summary of Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending March 31,2023 (U.S. GAAP)

OMRON Corporation (6645)

Exchanges Listed: Tokyo

URL: https://www.omron.com/global/en/

Representative: Yoshihito Yamada, President and CEO

Contact: Toyoharu Tamoi, Executive Officer, Senior General Manager, Global Finance and Accounting HQ

Telephone: +81-75-344-7070

Filing of Quarterly Securities Report (Shihanki hokokusho)(scheduled): February 10, 2023

Start of Distribution of Dividends (scheduled):－

Preparation of Supplementary Materials for the Quarterly
Financial Results: Yes

Holding of Presentation of Quarterly Financial Results: Yes (Financial results presentation held via online streaming and teleconference for investors on January 30)

Note: Figures are rounded to the nearest million yen.

1. Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2023

(April 1, 2022 – December 31, 2022)

(1) Sales and Income (cumulative) (Percentages represent changes compared with the same period of the previous fiscal year.)

Note: Comprehensive income: Nine months ended December 31, 2022: 70,493 million yen (7.5% change);
Nine months ended December 31, 2021: 65,599 million yen (59.1% change)

(2) Consolidated Financial Position

2. Dividends

Note: Revisions since the most recently announced dividend forecast: No

3. Projected Results for the Year Ending March 31, 2023 (April 1, 2022 – March 31, 2023)(Percentages represent changes compared with the same period of the previous fiscal year.)

Note: Revisions since the most recently announced performance forecast: No

*Notes

(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries due to changes in the scope of consolidation): No

New: - company (company name) Excluded: - company (company name)

(2) Application of simplified accounting methods and/or special accounting methods: No

(3) Changes in accounting policy

(a) Changes in accounting policy accompanying revision of accounting standards, etc.: No

(b) Changes in accounting policy other than (a) above: No

(4) Number of shares issued and outstanding

Note: As of the end of the consolidated first nine months of the fiscal year ending March 31, 2023, 600,208 shares of OMRON stock held for Board Incentive Plan and Employee Stock Ownership Plan are included in period-end treasury stock. The average number of shares during the period includes treasury stock deducted in the calculation of net income per share attributable to OMRON shareholders.

Table of Contents

1. Qualitative Information on Quarterly Financial Results

(1) Description of Results of Operations

General Overview

OMRON Group sales increased year on year for the cumulative consolidated third quarter (April through December 2022). Sales in the first quarter (April through June) were impacted significantly by the Shanghai lockdowns, mainly in the Industrial Automation Business. However, sales increased significantly year on year due to a recovery in production and the rapid ramp-up of supply capacity in the second quarter and later to respond to heavy order backlogs.

Gross profit margin was affected by factors including soaring materials prices and a decline in capacity utilization at the main plant of our Industrial Automation Business in the first quarter. However, we narrowed the year-on-year decline in gross profit ratio throughout the first half through ongoing company-wide efforts to improve the value-added ratio, including price optimizations. We continued with active investing for future growth to achieve the goals of our medium-term management plan (SF 1st Stage).

As a result, operating income rose year on year. Both sales and operating income marked a record high for any cumulative consolidated third quarter.

Consolidated results for the cumulative consolidated third quarter of fiscal 2022 were as follows.

(Billions of yen, except exchange rate data and percentages)

Results by Business Segment

IAB (Industrial Automation Business)

(Billions of yen, %)

Note: Due to a revision of business management classifications, certain businesses of the IAB have been transferred to the DMB beginning with the fiscal year ending March 2023. Accordingly, the Company reclassified results for the fiscal year ended March 2022 under this new categorization for presentation herein.

Sales

Capital investment trends in the manufacturing industry indicate a risk of slowdown in the near term. However, demand for semiconductor production equipment, electric vehicles (EVs), and rechargeable batteries, on which we focus, remained steady.

Under these circumstances, we continued to accelerate efforts to strengthen supply capacity against the backdrop of a heavy order backlog. As a result, sales for the cumulative consolidated third quarter rose significantly year on year.

Operating Income

Despite the impact of lower factory utilization rates in the first quarter, higher material and logistics costs, and continued execution of growth investments, the segment posted a significant increase in operating income year on year due to the large increase in sales.

HCB (Healthcare Business)

(Billions of yen, %)

Sales

Demand, mainly for blood pressure monitors, remained sluggish, affected by declining consumer confidence in response to global inflation. Demand was also impacted by dealer closures and stagnation in our distribution networks due to the Zero-COVID policy in China.

Despite these circumstances, we captured needs associated with growing health consciousness globally, while foreign exchange rates also provided a positive impact. As a result, sales rose year on year.

Operating Income

Despite efforts to curb fixed costs and optimize prices, operating income declined significantly year on year due to soaring materials prices and continued investments in future growth.

SSB (Social Systems, Solutions and Service Business)

(Billions of yen, %)

Sales

The Energy Solutions Business continued to experience firm demand for renewable energy-related solutions, mainly for captive consumption, due to factors including soaring energy costs. With the recovery in the number of railway users, the Public Transportation System Business saw the beginnings of a recovery in customer investment demand in the second quarter.

As a result, sales increased significantly year on year.

Operating Income (loss)

Despite the foreign exchange impact of foreign currency-denominated purchases, operating loss narrowed year on year due to higher sales and continued efforts to optimize prices.

DMB (Devices & Module Solutions Business)

(Billions of yen, %)

Note: Due to a revision of business management classifications, certain businesses of the IAB have been transferred to the DMB beginning with the fiscal year ending March 2023. Accordingly, the Company reclassified results for the fiscal year ended March 2022 under this new categorization for presentation herein.

Sales

Although there were signs of a global slowdown in parts for the consumer industry, demand remained strong for products in which the business focuses, including solar power generation, storage batteries, and other energy-related products, as well as semiconductor inspection equipment-related products.

In response to this rising demand, we improved supply chains, resulting in a significant increase in sales year on year.

Operating Income

Despite the impact of soaring raw material prices and other factors, operating income increased significantly year on year, mainly due to a significant increase in sales, as well as efforts to optimize prices and improve productivity.

(2) Description of Information on Outlook, Including Consolidated Performance Forecast

We recognize that the risk of a global economic slowdown in the business environment surrounding the OMRON Group will increase in the fourth quarter, particularly for uncertainties related to demand in the Chinese market. We also expect the yen to gain more strength in the fourth quarter compared to our previous forecast.

Despite this business environment, the OMRON Group expects both net sales and operating income for the year to be in line with our prior forecasts in response to our efforts to strengthen supply capacity to meet heavy order backlog in the Industrial Automation Business and Devices & Module Solutions Business, as well as through company-wide price optimization and other measures to improve gross profit margin.

In light of these circumstances, we left full-year consolidated performance forecasts unrevised from the forecast announced previously (October 26, 2022).

We set exchange rate assumptions for the fourth quarter to USD1 = JPY125.0, EUR1 = JPY135.0, and CNY1 = JPY19.0. (The assumed exchange rates used for the fourth quarter in our previous forecast were USD1 = JPY140.0, EUR1 = 140.0, and CNY1 = 20.0.)

2. Quarterly Consolidated Financial Statements and Notes

(1) Quarterly Consolidated Balance Sheets

(Millions of yen)

(Millions of yen)

(2) Quarterly Consolidated Statements of Operations and Quarterly Consolidated Statements of Comprehensive Income

(Quarterly Consolidated Statements of Operations)

(Nine months ended December 31, 2022)

(Millions of yen)

Note: Other expenses, net for the nine months ended December 2021 includes impairment loss of JPY3,384 million on goodwill related to NS Industria de Aparelhos Medicos LTDA. in Brazil, which was acquired under our Healthcare Business

(Quarterly Consolidated Statements of Comprehensive Income)

(Nine months ended December 31, 2022)

(Millions of yen)

(3) Consolidated Statements of Cash Flows

(Millions of yen)

Note: Free cash flow is cash flow from operating activities plus cash flow from investing activities.

(4) Notes Regarding Consolidated Financial Statements

(Notes Regarding Assumptions of Going Concern)

None applicable

(Notes in the Event of Significant Changes in Shareholders' Equity)

None applicable

(Segment Information)

Business Segment Information

(Millions of yen)

Note: Due to a revision of business management classifications, certain businesses of the IAB have been transferred to the DMB beginning with the fiscal year ending March 2023. Accordingly, the Company reclassified results for the fiscal year ended March 2022 under this new categorization for presentation herein.

Sales by Geographical Region

(Millions of yen)

Note1: Due to a revision of business management classifications, certain businesses of the IAB have been transferred to the DMB beginning with the fiscal year ending March 2023. Accordingly, the Company reclassified results for the fiscal year ended March 2022 under this new categorization for presentation herein.

Note 2: Major countries or regions belonging to segments other than Japan are as follows:

(1) Americas: United States of America, Canada, Brazil

(2) Europe: Netherlands, Great Britain, Germany, France, Italy, Spain

(3) Greater China: China, Hong Kong, Taiwan

(4) Southeast Asia and Others: Singapore, Republic of Korea, India, Australia

(5) Direct Exports: Direct export transactions

(end)

Emitter:	OMRON Corporation Shiokoji Horikawa, Shimogyo-ku 600-8530 Kyoto Japan
Contact Person:	Jan Hutterer
Phone:	+49 172 3462831
E-Mail:	jan.hutterer@kirchhoff.de
Website:	www.omron.com
ISIN(s):	DE0008647488 (Share) JP3197800000 (Share)
Stock Exchange(s):	Regulated Market in Frankfurt; Free Market in Berlin, Hannover, Stuttgart
Other Stock Exchanges:	NASDAQ, Tokio