2019_2q_omron_e

12/42 H2 Business Environment by Segment (Change vs. Initial Plan)

I will begin with a discussion of our view of the operating environment. We expect the uncertain business environment to continue in H2, on the back of US-China trade friction, the slowdown in semiconductors and weaker emerging market currencies. In IAB, we expect to see weakness in the Digital industries, particularly in investments for semiconductors and smartphones. There has been some suggestion that semiconductors might recover in Q4 but we prefer to take a cautious view. In contrast, we expect the Auto, Food & Beverage and Social Infrastructure industries to remain solid. While HCB is likely to be impacted by weaker emerging market currencies and lackluster consumer spending in China, we expect global sales to remain firm, supported primarily by strength in the online channel and the emerging markets. Notwithstanding, while the operating environment is likely to remain uncertain in the near term, we believe the longer-term fundamental societal trends supporting investments in factory automation and continued advances in healthcare remain unchanged, and will be supportive for IAB and HCB respectively. We remain focused on initiatives to support longer-term growth. Next slide please.