OMRON Reports Financial Results for the First Half Ended September 30, 2005.

Kyoto, Japan, Oct 31, 2005 - (JCN Newswire) - OMRON  Corporation (TSE: 6645; NYSE: OMRNY), a global leader in automation, sensing and control technologies, has announced consolidated results for the first half ended September 30, 2005. In a sluggish market for consumer and commerce components for IT and digital-related products, net sales for the period were JPY 285.3 billion, a 5.6% decrease from the previous interim.

This decrease, however, reflected the substantial effect of the transfer of the ATM and other information equipment business to an equity affiliate in October 2004. Excluding the transferred information equipment business, net sales increased 3.7 percent over the previous interim as a result of solid sales of the Omron Group's core factory automation control systems and automotive electronic components business.

Income levels remained near levels of the previous interim as a result of Omron's ongoing measures to raise efficiency to realize a strong profit structure, in addition to the return of the substitutional portion of the employees' pension fund. Operating income was JPY 31.2 billion, an increase of 0.2% compared with the previous interim, income before income taxes was JPY 31.7 billion, an increase of 9.5%, and net income posted at JPY 16.7 billion, an increase of 1.8%.

1) Consolidated Financial Summary for the First Half Ended September 30, 2005
                                                               (yen millions)
                   First Half Ended  First Half Ended   Change     Year Ended
                    Sept. 30, 2005    Sept. 30, 2004      YoY      March 2005

Operating Results

Net Sales                 285,362         302,272        (5.6%)       608,588
Operating Income           31,260          31,198         0.2%         56,111
Income Before Taxes        31,775          29,001         9.5%         52,548
Net Income                 16,728          16,439         1.8%         30,176
EPS (basic)(yen)            70.28           68.81        +1.47         126.52
EPS (diluted)(yen)          70.26           67.06        +3.20         124.75

Operating income/
total sales (%)             11.0             10.3        +0.7P
Income before taxes/
total sales (%)             11.1              9.6        +1.5P

Financial Position

Total Assets              548,301         571,242        (4.0%)       585,429
Total Sh'holders Equity  354,135     300,247        17.9%        305,810
Sh'holders Equity Ratio   64.60%       52.6%       +12.0P         52.20%
Shareholders EPS (yen)   1,487.74        1,261.22      +226.52       1,284.81

Cash Flows

Net Cash from
  Operating Activities     23,275          33,581       (10,306)       61,076
Net Cash from
  Investing Activities   (22,689)        (16,485)       (6,204)      (36,050)
Net Cash from
  Financing Activities   (26,422)        (37,265)       10,843       (40,684)
Cash and Cash Equivalents
  at End of Period         55,606          77,487       (21,881)       80,619

2) Results by Business Segment

Industrial Automation Business

In Japan, investments to improve quality and safety were firm, and sales of the safety business and quality solutions business, which OMRON has positioned as strategic growth businesses, grew steadily. However, sales of products for the semiconductor and digital appliance industries, which are in an adjustment phase, were sluggish, and overall domestic sales were down compared with same period in the previous fiscal year.

In overseas markets, overall sales were strong in North America, due to increased sales of products to the automobile industry and of the quality solutions business. In Europe, despite the effect of restrained investment among manufacturers due to weak economic conditions, sales of inverters and servomotors increased, and foreign currency translation also increased sales. Sales were strong in Southeast Asia and Greater China, where exports continued to grow briskly.

As a result, segment sales for the interim period were JPY 130,272 million, an increase of 2.4 percent from the same period in the previous fiscal year.

Electronic Components Business

In Japan, overall sales of products such as miniature backlights for mobile devices and relays for air conditioners were weak due to factors including inventory adjustments in the consumer and commerce industry, which started in the second half of the previous fiscal year. Overseas, OMRON strengthened sales and marketing in the IT and mobile markets in the United States and Europe, which are growth areas, and expanded production capacity and reinforced sales capabilities aimed at the rapid growth of the China business. However, sales were weak due to factors such as a delayed recovery in sales of communications relays against the backdrop of a weak economy in Europe and restrained public works investments in China, and greater price competition for electronic appliances.

As a result, segment sales were JPY 45,924 million, a decrease of 8.1 percent from the same period in the previous fiscal year.

Automotive Electronic Components Business

Global automobile production volume during the interim period was strong overall, although there were differences by manufacturer and country. In addition, needs are increasing for car electronics for automobile safety and environmental friendliness, and OMRON released products that meet those needs to match customers' new vehicle investment. Sales were strong in Japan, North America and Asia, and increased substantially in Europe due to the effect of the acquisition of a subsidiary in the previous fiscal year.

As a result, segment sales were JPY 35,130 million, an increase of 16.3 percent from the same period in the previous fiscal year.

Social Systems Business

In the public transportation systems business, despite the strong contribution from equipment deliveries related to the opening of new train lines in the Kanto region and renovation demand, sales decreased substantially compared to the previous fiscal year, when there was major demand associated with the issue of newly designed currency bills. In the security solutions business, sales grew favorably, centered on demand from large customers.

In addition to the above, the ATM and other information equipment business was transferred to an equity affiliate in October 2004. As a result, segment sales were JPY 33,991 million, a decrease of 42.3 percent from the same period in the previous fiscal year.

Healthcare Business

In Japan, interest in healthcare continued to increase, and despite the slackening growth rate of body composition monitors, which expanded strongly in the previous fiscal year, sales of digital blood pressure monitors and other products were favorable, and overall sales increased over the same period in the previous fiscal year. In overseas markets, sales declined due to slower demand for digital blood pressure monitors in the United States and China, but sales of digital blood pressure monitors and nebulizers, which are core products, increased in Europe and Southeast Asia.

As a result, segment sales were JPY 27,550 million, an increase of 15.3 percent from the same period in the previous fiscal year.

Others

Among existing businesses, in the entertainment business, although competition continued to intensify for commercial game machines, including printed sticker machines, overall sales increased over the same period in the previous fiscal year due to steadily expanding sales of content for cellular phones and other new businesses. In the computer peripheral business, IT investment recovered against the backdrop of improved corporate earnings, and sales of products such as permanent power supplies increased solidly. In addition, the commissioned software business performed well amid improvement in corporate IT investment.

In new business themes, sales of the radio frequency identification (RFID) business grew steadily along with the trend toward practical application of IC tags in Japan and overseas.

As a result, segment sales totaled JPY 12,495 million, an increase of 3.0 percent from the same period in the previous fiscal year.

2) Interim Distribution of Profits

In accordance with the "Basic Policy for Distribution of Profits" stated above and in consideration of results in the interim period ended September 30, 2005, OMRON will increase the interim dividend by JPY 2.00 per share compared with the previous interim dividend to JPY 12.00 per share.

3) Outlook for the Fiscal Year Ending March 31, 2006

Looking at the economic environment for the second half of the fiscal year, although elements of uncertainty regarding the outlook for the global economy will remain, including pressure on corporate profits due to high crude oil and raw material prices and the direction of exchange rates, factors such as the rebound in IT and digital-related demand that started in summer are expected to support a gradual recovery trend.

In markets related to the OMRON Group, the market for factory automation control systems for manufacturing industries in Japan and overseas is expected to expand gradually, supported in part by an upturn in capital investment demand. In addition, demand for automotive electronic components is projected to remain favorable. The market for consumer and commerce components for IT and digital-related products, which was weak during the first half of the fiscal year, is expected to rebound slowly starting in the second half.

Based on these economic projections, the OMRON Group expects net sales for the fiscal year to remain in line with its initial forecast, following interim period results. Income is also expected to be in line with the initial forecast, as the OMRON Group will continue to aggressively make growth investments in China and in new business areas, and will also work to enhance the profit structure of existing businesses.

For the full fiscal year, OMRON projects net sales of JPY 625.0 billion, operating income of JPY 65.0 billion, income before income taxes of JPY 63.0 billion and net income of JPY 36.0 billion, unchanged from the forecast announced on April 27, 2005.

The assumed exchange rates for the second half are $US1 = JPY 110 and 1 Euro = JPY 135.

Projected Results for the Year Ending March 31, 2006

                                                           (yen millions)
                                      Year Ended             Year Ended
                                    March 31, 2006         March 31, 2005
                                     (projected)              (actual)

Net Sales                              625,000                 608,588
Operating Income                        65,000                  56,111
Income Before Income Taxes              63,000                  52,548
Net Income                              36,000                  30,176
Net Income per Share (yen)              151.24                  126.52
Net Income per Share, diluted (yen)        --                   124.75
Return on Equity                         10.7%                   10.4%

Operating income/
total sales (%)                          10.4%                    9.2%
Income before taxes/
total sales (%)                          10.1%                    8.6%

4) Full Year Distribution of Profits

In accordance with the "Basic Policy for Distribution of Profits" stated above, OMRON plans to pay an annual cash dividend of JPY 24.00 per share (interim cash dividend per share: JPY 12.00).

Copyright [c] 2005 JCN Newswire. All rights reserved. A division of Japan Corporate News Network K.K.