2019_4q_omron_e

38/39 Questioner(5)

(Questioner 5) I have 2 questions. My first question is about cash management. Typically, your policy has been to keep cash on hand at around 1-2 months’ worth of sales. With the proceeds from the sale of AEC, you will receive ￥100 bn, which will push up your cash level. I assume your first priority will be to allocate to growth investments but has there been any change to how you think about cash? (Yamada) Our policy for allocating cash is unchanged. Our first priority is to allocate cash to growth investments. The next is a stable dividend. Beyond this, we may choose to buy back shares from time to time. (Q) Is there any change in your policy for the level of cash on hand you maintain? (Oue) As noted by CEO Yamada, our basic policy is unchanged. That said, the cash proceeds we receive from the deal will be handled separately from normal cash on hand. We will be allocating the proceeds to growth investments for which the time frame is likely to be different. For the time being, we will be managing the proceeds from the deal separately from normal cash on hand. (Q) Thank you. My second question is about the outlook for IAB. Obviously, near-term conditions are poor. In anticipation of a recovery, what will you be looking at as leading indicators? In general, many are looking at trends in China or the semiconductor market, but what will OMRON be looking at? When do you expect to see signs of a rebound? If you have a view, could you share it with us? (Yamada) In terms of indicators, we are generally looking at the indicators that everyone is tracking, such as the semiconductor market or China auto sales volume or machine tool order trends, for which the latest data was in the Nikkei today. As a side note, the Nikkei was reporting China to be down 44%. We monitor all the major indicators. In addition, we have direct relationships with leading players in each segment of manufacturing, so we look at their forecasts as well. (Q) Thank you. (Itagaki) Next, the person toward the front of the room, please.