OMRON Corporation: Announcement on New Long-Term Vision and Medium-Term Management Plan

Kyoto (pta020/01.03.2022/10:36 UTC+1)

March 1, 2022

Announcement on New Long-Term Vision and Medium-Term Management Plan

OMRON Corporation　(TOKYO: 6645; ADR: OMRNY) announced today the formulation of its new long-term vision for fiscal 2030, "Shaping the Future 2030 ("SF2030")," and the three-year medium-term management plan (FY2022 - FY2024) ("SF 1st Stage") as follows. The investor briefing on the long-term vision and the medium-term management plan is scheduled for Wednesday, March 9, 2022 (Japan Standard Time).

1. About the Long-Term Vision

Since its inception in 1933, OMRON has adhered to its corporate philosophy to solve social issues through business and contribute to the realization of a better society. As our society undergoes a period of rapid transformation, we believe that we should lay down stories for our transformation and new value creation in order to make our presence felt more and solve more social issues, thus contributing to our stakeholders, which include investors and the general public. The long-term vision SF2030 underscores OMRON's sincere desire to shape a sustainable society through our activities while at the same time enhancing our corporate value as we advance business growth and sustainability in an integrated manner.

In view of the need to leverage our automation technology, which is one of our strengths with a significant social impact, and customer and business assets over the next ten years when numerous social issues are expected, we have chosen the following three social issues that we will address and four domains where we will create social value by solving the three social issues.

Automation to empower people, continually creating social needs

"Achievement of carbon neutrality", "Realization of a digital society", "Extension of healthy life expectancies."

1. Industrial automation: Contributions to the "advancement of manufacturing that underpins a sustainable society"
2. Healthcare solution: Contributions to the "achievement of Zero Events of cardiovascular disease"
3. Social solution: Contributions to the "spread and efficient use of renewable energy and the sustainability of infrastructure of a digital society;"
4. Device & module solution: Contributions to the "spread of new energy and high-speed communication"

2. About the Medium-Term Management Plan

Below is the overview of the three-year medium-term management plan, SF 1st Stage (FY2022- FY2024).

An attempt at value creation by accelerating transformation

In the SF 1st Stage, we will strengthen our initiatives for transformation in two domains, as well as and sustainability initiatives.

1. Business transformation
   1. Evolution of the four core businesses: Industrial Automation Business (IAB), Healthcare Business (HCB), Social Systems, Solutions and Service Business (SSB), and Electronic and Mechanical Components Business (EMC)
   2. Expansion of the service business utilizing customer assets
   3. Creation of new social issue-based businesses
   4. Transformation of corporate management and organizational capabilities
      • Acceleration of diversity & inclusion
      • Data-driven corporate management through DX
      • Improvement of supply chain resilience
   5. Strengthening of sustainability initiatives
      • Reduction of greenhouse gas (GHG) emissions for de-carbonization and lower

environmental impact

• Instillment of respect for human rights globally

Evolution of the Four Core Businesses (Focus Businesses)

IAB: Digital, environmental mobility (NEV), food & daily necessities, medical, and logistics

HCB: Cardiovascular, respiratory, pain management, and remote patient monitoring services

SSB: Energy (housing, industry), management & services

EMC: Products for DC-powered equipment and high-frequency equipment

Management Targets (Financial)

*1 As announced with Q3/FY2021 earnings results *2 Forex assumptions: 1USD = 113 JPY, 1EUR = 130 JPY, 1RMB = 17.8 JPY

*3 Excluding impact of the transfer of the Automotive Electronics Components Business

Initiatives to Achieve De-Carbonization and Lower Environmental Impact

*1　GHG＝Greenhouse Gas

*2 GHG emissions from in-house power consumption at 13 production sites and 63 non-production sites (HQ, R&D, sales) are covered

*3 Scope 3 targets for 2050 have not yet been determined. It will be formulated after further verification and examination

Management Targets (Non-Financial)

*1 Sales from focus businesses that contribute to "Achievement of carbon neutrality", "Realization of a digital society", and "Extension of healthy life expectancies"

*2 GHG emitted from the use of electric power by OMRON (Scope 2)

*3 13 production sites and 63 non-production sites (HQ, R&D, sales)

*４ The UN Guiding Principles on Business and Human Rights

Strategic Targets

*1 Amount of added value per unit of labor cost (production, SG&A, development)

*2 Sustainable Engagement Index, OMRON's employee engagement survey

3. Cash Allocation and Shareholder Returns Policy During the SF 1st Stage

1. Aiming to maximize corporate value through the realization of the long-term vision, OMRON prioritizes the necessary investments to create new value from the medium- and long-term perspectives. During the SF2030 1st Stage, priority will be placed on investments for solving social issues, creating social needs, developing human resources, promoting research and development, capital investments to ramp up production capacity and advance the digital transformation (DX), and investments in growth initiatives such as M&A&A (merger, acquisition, and alliance), as well as investments in sustainability initiatives such as de-carbonization and reduction of our environmental impact and incorporation of respect for human rights in the value chain, while at the same time returning profits to shareholders in a stable and sustainable manner.
2. Such investments for value creation and shareholder returns will be, at least in principle, sourced from internal reserves and operating cash flows that are generated continually, as we use appropriate financing facilities when necessary. We will maintain a degree of financial soundness that allows us to seek financing regardless of the current financial situation.

1. With priority being placed on the investments necessary for value creation over the medium- and long-term, annual dividends will be based on "dividends on equity (DOE) of around 3%." With the past dividend records also being taken into account, we will ensure stable and sustainable shareholder returns.
2. OMRON will distribute retained earnings accumulated over the long term after making the above investments and profit distribution to shareholders through strategic share buybacks and other measures.

(end)

Emitter:	OMRON Corporation Shiokoji Horikawa, Shimogyo-ku 600-8530 Kyoto Japan
Contact Person:	Jan Hutterer
Phone:	+49 172 3462831
E-Mail:	jan.hutterer@kirchhoff.de
Website:	www.omron.com
ISIN(s):	DE0008647488 (Share) JP3197800000 (Share)
Stock Exchange(s):	Regulated Market in Frankfurt; Free Market in Berlin, Hannover, Stuttgart
Other Stock Exchanges:	NASDAQ, Tokio