2020_1q_omron_e

2/38 ■Summary

Before starting the presentation, I will explain the changes to our disclosures related to the transfer of the AEC business. In compliance with US GAAP, the AEC business has been reclassified as a discontinued operation and its earnings will be reported accordingly. Our earnings presentation today will focus on the results and forecasts for continuing operations. The three key points for today’s presentation are as follows. The first is the Q1 FY2019 results for continuing operations. Both sales and profits fell Y/Y. Uncertainty in the operating environment increased, primarily for IAB and EMC, leading to a shortfall in sales versus the internal plan. However, reflecting strong discipline in controlling fixed costs, operating income was in line with plan. The second is our full-year forecasts for continuing operations. We are facing an operating environment for IAB and EMC which is more challenging than initially expected. We believe there is a possibility that this period of uncertainty could be prolonged. However, we expect SSB, HCB and the Environmental Solutions business to remain firm. Given this environment, we will implement short- and medium-term profit structure reforms. Our aim is to develop a robust and resilient profit structure. We believe our profit targets are achievable and therefore maintain our full-year forecasts. The third is SSB. The Social Systems Business, which is one of our focus domains, continues to show solid growth. Today, I will spend some time discussing the structure of the SSB business and highlighting its strengths.