2020_2q_omron_e

37/37 Questioner(6)

(Questioner 6) Thank you. You have previously talked about the disciplined focus on ROIC management. According to the data sheet handout, reflecting the impact of the sale of the AEC business, ROIC this year is expected to be over 12%, which is a good level. This time you talked about the 3 domains and 1 business; next April, you will combine SSB and the Environmental Solutions business. I do have some concerns about how these changes will impact disclosures. This aside, I have 2 questions. There are a lot of SBUs within OMRON. Can you tell me exactly how many SBUs you have? Also, there was an earlier question about EMC, regarding the temporary decline in ROIC. Which SBU do you think will be the next to require restructuring or is the restructuring done? I would be grateful for any color you could provide. (Yamada) When you say SBUs, you are referring to the individual business units within the various internal companies? (Questioner 6) Yes. I don’t remember exactly when but a number of years ago, you did show a slide showing the SBUs, although it was only once. (Yamada) We have 90-plus SBUs that have individual ROIC targets, although this includes OAE which will go away at the end of October. As such, the number will fall slightly but, when we talk about business portfolio management, this is what we are looking at. On your question about restructuring, our initiatives at EMC are ongoing. We are still in the midst of reorganizing and consolidating our production facilities. The downturn in demand struck while we were in the process of restructuring the business, exacerbating the downturn in profits. However, we will complete the restructuring in the current fiscal year. We have also completed the AEC transfer and the exit from the backlight business. As such, the remaining individual businesses are very healthy. Therefore, if we can get EMC back on track, then each of our businesses will be uniquely and well positioned. (Questioner 6) I would just like to confirm that with the exception of AEC and the backlight business, all of the other SBUs are generating returns in excess of the 6% WACC. (Oue) Given the current situation for EMC, it is currently not generating a return in excess of WACC but all of the other businesses are generating returns in excess of 6%. (Questioner 6) Thank you. (Okumura) We are close to the end of the allotted time. If there are further questions, we ask you kindly limit yourself to one question per person. Thank you. It appears there are no more questions. We will close the Q&A session here. We would be grateful if you can take the time to complete our feedback sheet. This concludes the H1 FY2019 results briefing for Omron. Thank you for your participation today.