2019_2q_omron_e

2/42 ■Summary

This is a summary of the three key takeaways. First, our H1 FY2018 results. Unfortunately, we fell short of plan. Factors such as US-China trade friction, a slowdown in the semiconductor industry and the depreciation of emerging market currencies meant that the downturn in the operating environment we saw from Q2 onward was worse than we had expected. As a result, topline growth was not as strong as we had projected. Despite this, we were able to hit new record highs in both sales and gross profits. Continued growth at IAB and HCB supported overall topline growth. With regard to investments for future growth, including investments in R&D, hiring of sales engineers and marketing investments, we executed as planned. As a consequence, H1 profits declined Y/Y. Second, our full-year forecasts. We expect continued uncertainty in the operating environment and as such, revise down our full-year forecasts. That said, the longer-term underlying fundamental trends in social needs, such as demand for more sophisticated manufacturing facilities, or automation capable of responding to ever-higher quality requirements, remain unchanged in our view. Therefore, we will continue to invest selectively for future growth. We expect IAB and HCB sales to continue to grow, as a result of the investments in new product development and frontline resources, which have further enhanced our relationships with our customers. HCB should also benefit from investments to date to expand the online channel. The third is our initiatives for further growth. We have new initiatives to drive further growth in IAB, the business which is of the most interest to everyone here today. I will discuss these initiatives in greater detail later but we have launched a new business model for IAB, i-BELT. Progress to date has been good. We will continue to focus on achieving sustainable growth by continuously enhancing the growth cycle. Next slide please.