OMRON Annual Report 2006, 'Producing Win-Win Outcomes for All Stakeholders'.

Tokyo, Japan, Sept 20, 2006 - (JCN Newswire) - OMRON Corporation, a global leader in automation, sensing and control technologies, is pleased to present its Annual Report to Shareholders for the fiscal year ended March 31, 2006.

Thanks to the support of its stakeholders in fiscal 2005, the Omron Group enjoyed new highs for operating income and net income above last year's record numbers along with increased net sales and profits for the fourth consecutive term. For fiscal 2005, net sales increased 3.0% year on year to 626.8 billion yen, operating income rose 10.7% to 62.1 billion yen and net income was up 18.5% to 35.8 billion yen. Operating income was 4.4% below the initial target, mainly because of variations in the product mix. Return on shareholders' equity (ROE), however, was kept above 10%, finishing at 10.7%.

The Company has streamlined total assets to strengthen the balance sheet. Based on an acceleration of investment in growth, fixed assets have increased by 7.3 billion yen, but interest-bearing liabilities have declined by 20.9 billion yen. At the same time, shareholders' equity has gained by 57.1 billion yen. In addition to higher net income, the return of the substitutional portion of the pension fund has reduced minimum pension liability adjustments, and unrealized gains on available-for-sale securities have increased. As a result, the ratio of shareholders' equity has risen 9 percentage points year on year to 62%.

"Fiscal 2006 is the final milestone on the way toward meeting the targets we have set ourselves in the 2nd Stage of our long-term management plan, 'Grand Design 2010' (GD2010). Specifically, this plan calls for a "doubling of total business value" by fiscal 2007 compared with fiscal 2003 levels. In concrete terms, this means achieving net sales of at least 750 billion yen and operating income of at least 75 billion yen for fiscal 2007," said Omron President, Hisao Sakuta. "We have given careful consideration to the choice between maintaining sound profit through a modest investment in growth or rapidly moving in the direction of building a base for future growth possibly at the cost of some loss of profitability. However, I believe that current expectations with respect to Omron are toward the Company's future growth potential as indicated by the rise in its share price in fiscal 2005. Thus, on the premise that fiscal 2006 stands ready to be another year of higher sales and record profits, we are making a bold investment in sustainable future growth, even though this may temporarily push up costs."

To our Shareholders, Customers, and all other Stakeholders

The Omron Group has grown to reach the scale of a major corporation, but in fact our company is a collection of 120 small business units organically intertwined and built around our core competence of "sensing and control."

Our Group already operates in 33 countries, which means half our business and half our employees are now overseas. In addition to this globalization, it can be said that both decentralization and M&As will provide the necessary centrifugal force that will drive future growth, but from the perspective of corporate governance, the diversification of values and standards of judgment brought about by this centrifugal force is, on occasion, problematic. Thus, in order to strongly bind this centrifugal force to sustainable growth for the entire Group, I believe that it is necessary to counter it with centripetal force, and we are finding this centripetal force in 'The Omron Principles'.

The Omron Principles serve to announce our mission and methods of action to both those inside the Company and the public at large. These fundamental values are the foundation for decision-making and standards of behavior. However, if they are going to be a source of centripetal force, The Omron Principles must also transcend personal and business interests. Therefore, last year, we formed a committee to examine our corporate values, and with the help of an employee survey, debated, from various points of view, such important questions as who owns the corporation and what corporate principles are globally acceptable. This resulted in our establishment of The Omron Principles, the highest of which is "Working for the benefit of society", stemming from the idea that companies get their start in business by leveraging various resources that belong to society.

Through corporate governance based on The Omron Principles, we will inherit and pass on our commitment to "innovation driven by social needs" in order to contribute to society, and our resolve to keep "challenging ourselves to always do better" that comes from being a group of venture companies -- two manifestations of our founding DNA. I want to continue as a company that is chosen for its future promise.

(Excerpt from Chairman Yoshio Tateisi's message in the OMRON Annual Report 2006)

To download the OMRON Annual Report 2006, please visit the OMRON IR website at www.omron.com/ir/ir_annual.html

About OMRON

Headquartered in Kyoto, Japan, OMRON Corporation (TSE: 6645; NYSE: OMRNY) is a global leader in the field of automation. Established in 1933 and headed by President and CEO Hisao Sakuta, OMRON has more than 28,000 employees in over 35 countries working to provide products and services to customers in a variety of fields including industrial automation, electronic components, social systems (ticket gate machines, ticket vending machines and traffic control) and healthcare. The Company is divided into five regions and head offices are in Japan (Kyoto), Asia Pacific (Singapore), China (Shanghai), Europe (Amsterdam) and the US (Chicago). For more information, visit www.omron.com.

Source: OMRON

Contact:

OMRON Corporation
Yutaka Fujiwara
Senior General Manager
Finance and Investor Relations
Phone: [phone]

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