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OMRON Reports Record Financial Results for the Fiscal Year Ended March 31, 2005

Tokyo, Japan, Apr. 27, 2005 - OMRON Corporation (TSE: 6645; US: OMRNY), a global leader in automation, sensing and control technology, has again announced record financial results for the fiscal year ending March 31, 2005. Net sales rose 4.1% year-on-year to JPY 608.5 billion, while operating income increased 9.2% to JPY 56.1 billion. Net income before taxes increased 9.5% to JPY 52.5 billion, and net income rose 12.6% to JPY 30.1 billion. These reported income figures are each record highs for the company.

Sales were solid in the OMRON Group's core Industrial Automation Business, Electronic Components Business and Healthcare Business, due to factors including continued market expansion and the aggressive implementation of sales measures. Sales in the Social Systems Business (consisting of the Social Systems Solutions and Service Business Company and the Financial Systems Business Company) also continued to be firm due to the impact of demand related to the issuance of new banknotes in Japan. Sales in the Automotive Electronic Components Business were firm despite the impact of weak performance among major customers

Throughout the term, the OMRON Group followed the policy of "Maintaining ROE of 10% and Establishing a Structure for Growth" and a sub-policy of "Constant Structural Reform: Maintaining a Balance between Growth and Profitability" in clarifying domains for future growth and concentrating management resources in them. Moreover, OMRON promoted lasting efficiency gains to support the realization of its target profit structure.

Specifically, OMRON 1) worked to build a powerful business infrastructure system in China to support full-scale business growth in China, 2) made a series of major investments in designated core technologies in emerging growth markets as part of its technology-centered growth strategy, 3) implemented continuous reforms in working toward its target profit structure, and 4) concentrated on the critical issues of implementing and upgrading cash flow management.

As of March 31, 2004, total shareholders' equity improved to JPY 305.8 billion, up 11.3%. Shareholders' equity ratio grew 12.5% year-on-year to 52.2, while shareholders' equity per share rose 11.8% to 1,284.8.

OMRON is forecasting consolidated net sales of JPY 625.0 billion for the year ending March 31, 2006, a 10% increase, and consolidated net income of JPY 36.0 billion, 19% increase for the year ahead. Omron will pay cash dividends for the fiscal year ended March 31, 2004 of 24.00 yen per share. This consists of interim cash divided of 10.0 yen per share, and a year-end cash dividend of 14.0 yen per share.

Results by Business Segment
As of October 1, 2004, the ATM and other information equipment business that was included in the Social Systems Business was transferred to a new company, Hitachi-OMRON Terminal Solutions Corp., under a joint venture between OMRON and Hitachi Ltd. The figures for net sales do not include sales of the transferred business after October 1, 2004.

ustrial Automation Business
In Japan, the markets related to mobile phones and digital home appliances were firm in the first half, but entered a correction phase in the second half. However, investment to raise quality and safety remained firm among manufacturers in industries including semiconductors, flat-panel displays (FPD), electronic components, automobiles, food, machine tools, transportation equipment and packaging equipment. OMRON provides IT deployment support for the manufacturing industry and quality enhancing solution, which resulted in significantly expanded sales of PCB inspection systems, displacement sensors, vision sensors, networking equipment, motion controllers, safety-related devices and other products.

In overseas markets, growth in mainland China exhibited signs of slowing due to the impact of macroeconomic controls. However, sales in Greater China and Southeast Asia expanded substantially due to direct marketing to customers, strengthening and expansion of sales bases, strengthening of channels, stronger efforts to participate in social infrastructure projects, and other factors. In Europe, sales in Northern and Eastern Europe expanded rapidly, while sales in other countries remained firm. In the United States, performance remained solid, centered on the automotive industry.

As a result, segment sales were JPY 250.3 billion, an increase of 9.0 percent from the previous fiscal year.

ctronic Components Business
In Japan, firm conditions in semiconductor-related industries, higher demand for electricity due to an extremely hot summer, growth in the market for flat-panel televisions and other digital household appliances and other factors supported solid demand for relays, switches and connectors for consumer and commerce components. Overseas, sales of LED backlight modules and flexible printed circuit (FPC) connectors for cellular phones increased against the backdrop of a strong worldwide market for cellular phones and portable music devices.

In the business of backlights for cellular phones, price competition grew increasingly severe, but sales remained firm due to expansion in the market for cellular phones. In addition, sales were also favorable for components for the IT industry in Europe and China, where rapid construction of communications infrastructure is taking place, and for air conditioner manufacturers in Southeast Asia.

As a result, segment sales were JPY 101.1 billion, an increase of 13.6 percent from the previous fiscal year.

Automotive Electronic Components Business
In the automotive electronic components market, domestic automobile production volume increased marginally. Although reduction in sales volume among some customers impacted OMRON, sales of new products including laser radar devices, electric power steering controllers and door lock controllers increased, contributing to higher sales.

Overseas, challenging conditions continued in the U.S. market due to factors including a decrease in automobile unit production volume among the Big Three U.S. auto manufacturers and some Japanese car companies, the persistently strong yen, and continued intense price competition in the automotive relay market. However, in the markets of Europe, Korea and Asia, where future growth is expected, OMRON's aggressive development of new customers and other factors resulted in steady sales growth. In particular, exports from Korea to the U.S. market remained strong, and OMRON benefited from the acquisition of a relay company in Europe.

As a result, segment sales totaled JPY 64.5 billion, an increase of 9.7 percent from the previous fiscal year.

Social Systems Business
In the electronic fund transfer systems business, during the first half, the issue of newly designed currency bills in the domestic market resulted in a strong increase in demand for renewal of automated teller machines (ATMs) and automated bill changers, as well as conversion of existing machines to handle the new bills. In overseas markets, demand surged in Taiwan for financial equipment that can handle IC cards.

In the station management and settlement system markets, the issue of the new currency bills resulted in renewal demand. The extension of train lines and the start of service on new lines resulted in broad, large-scale demand. Demand increased for settlement equipment that can use IC cards to prevent counterfeiting. These and other factors resulted in a substantial increase in sales compared with the previous fiscal year.

In the traffic and road management systems market, large-scale demand from urban highway projects in the previous fiscal year did not recur. Demand for new road management systems slowed. The impact of administrative and budgetary pressures and intensifying market competition caused demand for traffic management systems to decrease. Due to these and other factors, sales decreased substantially.

As a result, segment sales totaled JPY 115.2 billion, a decrease of 15.3 percent from the previous fiscal year that in part reflected the transfer of the ATM and other information equipment business.

Healthcare Business
The rise in the number of hypertension patients and the obese population, as well as government measures to contain medical expenses, supported solid market expansion in Japan and overseas. As a result of OMRON's efforts to maintain and expand share in the markets it serves, the Company achieved sales growth compared to the previous fiscal year in all areas, excluding China. By product, sales of blood pressure monitors, a core product, and pedometers remained firm worldwide from the previous year. Sales of body composition monitors remained solid, as sales increased rapidly in Japan supported by the effect of television commercials, and also increased substantially in the United States.

As a result, segment sales were JPY 50.5 billion, an increase of 7.7 percent from the previous fiscal year.

Other Business
Among existing businesses, in the entertainment business, competition in the commercial game machine business continued to intensify. Mobile content and other new domains continued to expand steadily. Overall, sales increased compared to the previous fiscal year. In the computer peripheral business, sales of modems, broadband routers and other equipment remained firm. Sales in the systems integration business also remained firm against a backdrop of solid corporate investment in IT.

In nurturing new businesses, in the wireless sensing business sales of Carmoni, a simple anti-theft device for automobiles, expanded firmly. Sales also expanded steadily in the radio frequency identification (RFID) business.

As a result, segment sales totaled JPY 26.7 billion, an increase of 9.4 percent from the previous fiscal year.

3) Outlook for the Fiscal Year Ending March 31, 2006

The outlook for the economic environment in the fiscal year ending March 31, 2006 is that the deceleration trend evident in the second half of the past fiscal year will continue into the first half of the next fiscal year. IT and digital-related demand will remain in an adjustment phase, crude oil prices will be high and growth will slow in China. However, a mild upturn is expected in the middle of the fiscal year.

Against this background, OMRON will continuously implement structural reforms, secure higher sales and profits and make necessary investments. From the viewpoint of achieving a milestone during the next fiscal year, the second year of the second stage of GD2010, OMRON has set the policy for the fiscal year of "Advance toward a Strong Structure of High Profitability." OMRON will concentrate management resources in the domains it has identified for future growth. In working toward the profit structure targets of the second stage of GD2010, OMRON will promote lasting efficiency gains. Specifically, OMRON will 1) work to build a powerful business infrastructure in China to support full-scale business growth in China, 2) make a series of focused investments in designated core technologies in emerging growth markets as a technology-centered growth strategy, and 3) implement continuous reforms in working toward the target profit structure.

Dealing with regulated chemical substances and moving to further increase quality are other key themes for the fiscal year ending March 2006.

The outlook for the fiscal year ending March 2006 is that OMRON will continue to reinforce the profit structure of existing businesses to increase operating income. On the other hand, OMRON expects to aggressively make growth investments in China and in new domains. OMRON therefore projects net sales of JPY 625.0 billion, operating income of JPY 65.0 billion, income before income taxes of JPY 63.0 billion, and net income of JPY 36.0 billion. This forecast assumes exchange rates of US$=100 and 1 Euro=JPY130.

In accordance with the Company's "Basic Policy for Distribution of Profits" OMRON plans to pay an annual cash dividend of JPY 24.00 per share (interim cash dividend per share: JPY 12.00).

About OMRON
Headquartered in Kyoto, Japan, OMRON Corporation (TSE: 6645; ADR: OMRNY) is a global leader in the field of automation and sensing and control technology. Established in 1933 and headed by President and CEO Hisao Sakuta, OMRON has more than 26,000 employees in over 35 countries working to provide products and services to customers in a variety of fields including industrial automation, electronic components, social systems (ticket gate machines, ticket vending machines, and traffic control), and healthcare. The company is divided into five regions and head offices are in Japan (Kyoto), Asia Pacific (Singapore), China (Shanghai), Europe (Amsterdam) and US (Chicago). For more information, visit OMRON's website at www.omron.com.

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