OMRON Reports Financial Results for the First Half Ended September 30, 2006.

Kyoto, Japan, Oct 30, 2006 - (JCN Newswire) - OMRON Corporation (TSE: 6645; ADR: OMRNY), a global leader in automation, sensing and control technologies, has announced results for the first half ended September 30, 2006. Markets related to the OMRON Group were strong in general, due in part to the effects of the weaker yen and business acquisitions. As a result, OMRON Group net sales increased by 15.6 percent from the previous interim period to JPY 329,847 million.

Operating income was JPY 24,037 million, a 23.1 percent decrease from the same period in the previous fiscal year. Income before income taxes was JPY 29,890 million, a decrease of 5.9 percent from the same period in the previous fiscal year, due to factors including a JPY 10,141 million gain on the establishment of a retirement benefit trust and a JPY 5,915 million loss on the sales of land and buildings of the Tokyo Head Office. Net income for the period was JPY 14,793 million, a decrease of 11.6 percent from the same period in the previous fiscal year.

Profit categories were below the level of the same period in the previous fiscal year because the Company recorded an JPY 11,915 million gain on the transfer of the substitutional portion of the employees' pension fund in the previous fiscal year. Excluding this transfer gain, operating income increased 24.3 percent compared with the same period of the previous fiscal year.

For the year ending March 31, 2007, OMRON has revised forecasts to net sales of JPY 740,000 million, income before income taxes of JPY 65,000 million, net income of JPY 37,500 million, and net income of 162.69 per share. OMRON plans to pay an annual cash dividend of JPY 30.00 per share (interim cash dividend per share: JPY 15.00).

I) Consolidated Financial Summary for the First Half Ended September 30, 2006

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                                                          (yen millions)
                        H1 Ended  Change   H1 Ended  Change  Year Ended
                         9/30/06   % YoY    9/30/05   % YoY   3/31/2006
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Operating Results
------------------------------------------------------------------------

Net Sales                 329,847   15.6    285,362    (5.6)    626,782
Operating Income           24,037  (23.1)    31,260     0.2      62,128
Income Before Taxes        29,890   (5.9)    31,755     9.5      64,352
Net Income                 14,793  (11.6)    16,728     1.8      35,763

EPS (basic)(yen)            63.38             70.28              151.14
EPS (diluted)(yen)          63.35             70.26              151.05

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Financial Position
------------------------------------------------------------------------

Total Assets              610,426           548,301             589,061
Total Sh'holders Equity   357,277           354,135             362,937
Sh'holders Equity Ratio      58.5              64.6                61.6
Shareholders EPS (yen)   1,550.02          1,487,74            1,548.07

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Cash Flows
------------------------------------------------------------------------

Net Cash from
  Operating Activities     10,886            23,275              51,699
Net Cash from
  Investing Activities    (26,603)          (22,689)            (43,020)
Net Cash from
  Financing Activities      8,971           (26,422)            (38,320)
Cash and Cash Equivalents
  at End of Period         46,554            55,606              52,285

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Results by Business Segment

i) Industrial Automation Business

In Japan, sales of the safety business, application business and other strategic growth businesses grew steadily, reflecting brisk investment in improvement of quality and safety in order to enhance the functions of existing equipment. In addition, sales of core factory automation control systems surpassed the level of the same period in the previous fiscal year as a result of continued solid capital investment in the liquid crystal display and semiconductor industries and digital home appliance industry. In overseas markets, sales in North America were solid, with particular expansion of sales of control related equipment to oil and gas-related companies. In Europe, sales grew strongly, centered on sale of inverters, servomotors and sensor devices and other products. In China, where high growth is projected, sales increased due to OMRON's aggressive efforts in areas such as improvement of its sales infrastructure, expansion of production capacity, and introduction of new products.

As a result, segment sales for the interim period totaled JPY 146,895 million, an increase of 12.8 percent compared with the same period in the previous fiscal year.

ii) Electronic Components Business

In Japan, conditions in the semiconductor and machinery and equipment industries were strong, and the electronic components industry also maintained the recovery and expansion trend that began in second half of the previous fiscal year. In this environment, sales were generally solid, including sales of printed circuit board relays, a core product of this segment. In addition, OMRON strengthened the miniature backlight business by acquiring the shares of Pioneer Precision Machinery Corporation (now OMRON PRECISION TECHNOLOGY Co., Ltd.) from Pioneer Corporation in August 2006. Overseas, sales of consumer and commerce electronic components continued to increase steadily along with high GDP growth in China, where OMRON also began OEM production of large backlights for LCD televisions. Sales also expanded overall in the United States against a backdrop of solid capital investment and robust consumer spending.

As a result, segment sales were JPY 62,072 million, an increase of 35.2 percent compared with the previous fiscal year.

iii) Automotive Electronic Components Business

Global automobile production volume during the interim period was stable overall, and needs are increasing for car electronics for automobile safety and environmental friendliness. Against this backdrop, OMRON's products continued to be adopted in new car models, contributing to strong sales in this segment. By area, sales in Japan were essentially unchanged from the same period in the previous fiscal year, but overseas sales were strong. In particular, sales in North America grew substantially as OMRON launched new products such as wireless control devices.

As a result, segment sales for the interim period were JPY 42,751 million, an increase of 21.7 percent compared with the same period in the previous fiscal year.

iv) Social Systems Business

In the public transportation systems business, sales for the interim period increased substantially compared to the same period in the previous fiscal year, reflecting favorable demand for equipment renewals and other projects related to the use of common IC cards among different railway companies, mainly in the Kanto area. In the traffic and road management solutions business, demand for urban roads decreased, and in the security solutions business, sales of products to security companies decreased, resulting in a significant decline sales for the interim period compared to the same period in the previous fiscal year.

As a result, sales in this segment for the interim period totaled JPY 34,356 million, an increase of 1.1 percent compared to the same period in the previous fiscal year.

v) Healthcare Business

In Japan, awareness of metabolic syndrome (a condition with multiple risk factors that can easily cause lifestyle diseases such as diabetes, hypertension, hyperlipidemia and obesity) is expanding, and sales of digital blood pressure monitors, pedometers and body composition monitors increased strongly. Overseas, sales of digital blood pressure monitors, a core product, were slow in the United States, reflecting weaker consumer spending, but sales in Europe remained strong overall, driven by the digital blood pressure monitor business in Russia and Eastern Europe. In China, prices of digital blood pressure monitors dropped more than expected in an increasingly competitive environment, and sales decreased compared to the same period in the previous fiscal year.

In addition to the above factors, Colin Medical Technology Corporation (now OMRON COLIN Co., Ltd.), a medical equipment manufacturer that became a consolidated subsidiary in June 2005, contributed to sales. As a result, segment sales for the interim period were JPY 30,624 million, an increase of 11.2 percent compared with the same period in the previous fiscal year.

vi) Others

The others segment consists of new businesses being explored and developed by the Business Development Group and development and expansion of other businesses that are not covered by internal companies.

Among existing businesses, sales of the entertainment business continued to expand briskly with strong sales of photo sticker machines, a core product, and a steady increase in membership of mobile sites related to these machines. In the computer peripheral business, sales of uninterruptible power supplies and other products increased substantially. Sales were also strong in the growth areas of radio frequency identification (RFID) equipment and insulation monitoring devices.

As a result, segment sales for the interim period were JPY 13,149 million, an increase of 5.2 percent compared with the same period in the previous fiscal year.

Interim Distribution of Profits

For the interim period, OMRON will pay a dividend of JPY 15.00 per share, in accordance with the "Basic Policy for Distribution of Profits" stated above.

II. Outlook for the Fiscal Year Ending March 31, 2007

The outlook for the economic environment in the second half of the current fiscal year and thereafter continues to warrant little optimism, with a plateau in high crude oil prices, rising raw material prices, a slowdown in the U.S. economy and exchange rate fluctuations. However, firm consumer spending and robust corporate capital investment can be expected, and moderate growth is projected to continue.

In markets related to the OMRON Group, the market for factory automation control devices in Japan and overseas is expected to gradually expand, supported by corporate capital investment, and the market for consumer and commerce electronic components for IT and digital products is also projected to continue on a recovery track. The market for automotive electronic components for automobile manufacturers is expected to remain favorable, supported by increasing needs for car electronics, despite elements of concern such as slumping business at the "Big Three" manufacturers in North America.

In this environment, OMRON will continue to carry out its ongoing profit structure reforms, aiming to "Accelerate Growth while Securing Profit Increase," its fiscal year policy.

The OMRON Group's sales during the first half surpassed the level of the same period in the previous fiscal year, and are expected to exceed initial projections for the second half and beyond because of the positive effect of the weaker yen and the contribution of sales of acquired subsidiaries. As for consolidated profits, although cost increases are expected due to higher prices for materials such as silver and copper, OMRON expects to meet its initial projections based on increased sales, efficient management of SG&A expenses and an increased gain on establishment of a retirement benefit trust. However, non-consolidated profits are forecast to exceed the initial forecast due to factors including efficient management of SG&A expenses, an increased gain on establishment of a retirement benefit trust and the introduction of consolidated taxation.

Due to the factors above, in regard to the forecast for the fiscal year, OMRON has revised the figures announced on April 26, 2006 according to the "Revision to Forecast for Fiscal 2006 Full-Year Financial Results," which is being announced simultaneously with this summary of consolidated financial results.

The assumed exchange rates are $US1 = JPY 115 and 1 Euro = JPY 145.

Revisions to the Consolidated Forecast of Financial Results for the Fiscal Year Ending March 31, 2007

(U.S. GAAP)

                                                  (Millions of yen)
-------------------------------------------------------------------
                  Net Sales   Income before     Net income
                                       income taxes
-------------------------------------------------------------------
Previously announced        700,000          65,000         37,500
 forecast (A)
Revised forecast (B)        740,000          65,000         37,500
Difference (B-A)             40,000              --             --
Difference (%)                  5.7              --             --

Previous Full Year          626,782          64,352         35,763
 (ended March 31, 2006)
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Revisions to the Non-consolidated Forecast of Financial Results for the Fiscal Year Ending March 31, 2007

                                                  (Millions of yen)
-------------------------------------------------------------------
                          Net Sales        Ordinary     Net income
                                             income
-------------------------------------------------------------------
Previously announced        342,000          25,000         26,000
 forecast (A)
Revised forecast (B)        342,000          28,000         33,000
Difference (B-A)                 --           3,000          7,000
Difference (%)                   --            12.0           26.9

Previous Full Year          312,072          31,830         28,632
 (ended March 31, 2006)
-------------------------------------------------------------------

Outlook by Business Segment

i) Industrial Automation Business

In the second half of the fiscal year, solid growth is forecast to continue for the industry overall, backed by robust corporate capital investment. In such an environment, in Japan, OMRON will work to expand sales by reinforcing the sales strategies of existing businesses, including strategic growth businesses. Overseas, OMRON will strengthen its sales operations in strategic growth businesses and emerging markets. In Europe, OMRON expects to make a full-scale entry into the Russian market, and OMRON expects to promote sales growth in China with the continued introduction of new products. In addition, the sales of Scientific Technologies Incorporated (now OMRON SCIENTIFIC TECHNOLOGIES Incorporated), a leading manufacturer of safety devices in North America that OMRON acquired in September, are expected to contribute to the sales increase in this segment.

ii) Electronic Components Business

Raw material prices have continued to hover at a high level since the beginning of the year, but no major slowdown is expected in the business environment in the second half of the fiscal year. In November, OMRON will take over the optical communications components business for the FTTH ("Fiber To The Home," which refers to optical fiber-based data communications systems aimed at the consumer market) market from NHK Spring Co., Ltd., and will work to strengthen and expand this business. In addition, the sales of OMRON PRECISION TECHNOLOGY Co., Ltd. will contribute to results in the second half, and OMRON anticipates expanded demand for flexible printed circuit (FPC) connectors, jog switches and hinge products for mobile devices, and the full-scale launch of the large-backlight business in the Chinese market. As a result, a large increase in sales is projected.

Automotive Electronic Components Business

iii) In the second half of the fiscal year, slumping business among the Big Three auto manufacturers, which are major customers of OMRON in North America, as well as the trend toward slower unit sales of automobiles and the burden of high crude oil prices worldwide are expected to gradually have an impact on automotive production. Despite this environment, strong demand for OMRON's products and the release of new car models equipped with OMRON products by customers in Japan, and increased demand in the second half from Korean auto manufacturers, which was relatively weak in the first half, among other factors overseas, are projected to result in continued healthy sales in the second half.

iv) Social Systems Business

In the second half of the fiscal year, full-year sales of the public transportation systems business are projected to increase substantially compared to the previous fiscal year due to demand for renewal of equipment in connection with the use of common IC cards among different railway companies in the Kanto area and the shift from tickets to IC cards in the Kansai area. In the traffic and road management solutions business, there is demand for systems for the Ministry of Land, Infrastructure and Transport, but demand for urban roads is decreasing, while in the security solutions business, sales to major customers are not expected; full-year sales in both of these businesses are projected to decrease substantially year-on-year.

v) Healthcare Business

Despite elements of concern such as cooling consumer spending in the United States due to high gasoline prices and falling prices in China reflecting intensifying competition, the market is on an expansion course due to continued rising health consciousness in Japan and overseas and measures in various countries to reduce healthcare costs. In Japan, increased awareness of metabolic syndrome and structural reforms of the healthcare system are focusing attention on prevention of illness, and consequently, sales of biosensing devices such as digital blood pressure monitors, pedometers and body composition monitors are projected to be solid. In addition, the digital blood pressure monitor market in Europe and Russia is also expected to grow strongly.

vi) Others

Among existing businesses, in the entertainment business, sales of photo sticker machines are projected to remain solid, and the effects of this, along with continued expansion of the mobile phone content delivery service, are expected to result in an overall year-on-year increase in sales. In the computer peripherals business, OMRON will work to expand sales of uninterruptible power supplies. In growth businesses, OMRON will aim to expand sales with new products using UHF in the RFID business. OMRON will also work to smoothly launch new businesses, including energy monitoring services such as electrical energy measurement and insulation monitoring devices.

Full Year Distribution of Profits

In regard to distribution of profits for the fiscal year, in accordance with the "Basic Policy for Distribution of Profits" stated above, OMRON plans to pay an annual cash dividend of JPY 30.00 per share (interim cash dividend per share: JPY 15.00).

III. Financial Condition

i) Financial Condition for the Interim Period Ended September 30, 2006

Total assets: JPY 610,426 million (an increase of JPY 21,365 million from the end of the previous fiscal year)

Net worth: JPY 357,277 million (a decrease of JPY 5,660 million from the end of the previous fiscal year)

Net worth ratio: 58.5% (a decrease of 3.1 percentage points from the end of the previous fiscal year)

Total assets increased JPY 21,365 million compared with the end of the previous fiscal year. The main factor was a JPY 25,131 million increase in inventories.

Net worth decreased JPY 5,660 million compared with the end of the previous fiscal year, despite the increase from net income of JPY 14,793 million, due to an JPY 8,107 million decrease in net unrealized gains on securities (which decreases net worth) and a JPY 10,656 million increase in treasury stock (which decreases net worth).

ii) Summary of Cash Flows for the Fiscal Year Ended March 31, 2006

Net cash provided by operating activities was JPY 10,886 million, a decrease of JPY 12,389 million compared with the same period in the previous year, despite net income of JPY 14,793 million, due to factors including a gain on establishment of a retirement benefit trust and the increase in inventories.

Net cash used in investing activities totaled JPY 26,603 million, an increase of JPY 3,914 million from the same period in the previous year. Despite a gain on the sale of land and buildings of the Tokyo Head Office, acquisition of business entities increased expenditures.

Net cash provided by financing activities was JPY 8,971 million (an increase of JPY 35,393 million from the same period in the previous year due to the effect from the repayments of debt in the same period of the previous year), mainly because of an increase in proceeds from short-term bank loans.

As a result, cash and cash equivalents at the end of the interim period were JPY 46,554 million, a decrease of JPY 5,731 million from the end of the previous fiscal year.

IV. Outlook in Financial Condition for the Year Ending March 31, 2007

For the second half of the year ending March 31, 2007, OMRON projects an increase in net income in addition to an increase in income from the sale of land and buildings of the Tokyo Head Office. However, the Company projects that the effect of payments for acquisition of businesses and ongoing aggressive investments in growth, including investment in the Company's infrastructure in China and in product development as part of the Company's growth strategy, will result in a decrease in free cash flow - calculated as net cash provided by operating activities less net cash used in investing activities - compared with the previous fiscal year.

In financing activities, despite these capital requirements, OMRON will flexibly manage sources and uses of capital, taking financial conditions into consideration while efficiently deploying capital and maintaining appropriate capital levels throughout the Group.

Considering the above cash flow projections, OMRON believes that the balance of cash and cash equivalents of JPY 46,554 million as of September 30, 2006 is more than sufficient for business operations in the present economic conditions.

V. Cash Flow Indicators and Trends

----------------------------------------------------------------------
                      Interim   Interim   Interim        FY        FY
                        ended     ended     ended     ended     ended
                      9/30/04   9/30/05   9/30/06   3/31/05   3/31/05
----------------------------------------------------------------------

Net worth ratio (%)      52.3      64.6      58.5      52.2      61.6

Net worth ratio on
market value basis (%)  101.5     120.0     109.5      95.1     134.5

Debt repayment period
  (years)                  --        --        --       0.4       0.1

Interest coverage ratio
  (times)                49.7      50.2      21.7      55.6      57.6

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* Net worth ratio: Net worth/Total assets
* Net worth ratio on market value basis:
  Total market value of stock/Total assets
* Debt repayment period: Interest-bearing liabilities/Net cash
  provided by operating activities (not stated for interim periods)
* Interest coverage ratio: Net cash provided by operating
   activities/Interest expense
1. All indicators are calculated on a consolidated basis.
2. Total market value of stock is calculated by multiplying the
closing share price at the end of the period by the total number of
shares outstanding at the end of period (excluding treasury stock).
3. Net cash provided by operating activities is as reported in the
consolidated cash flows. Interest-bearing liabilities are
liabilities stated on consolidated balance sheets on which interest
is paid. Interest expense is as stated in notes to the consolidated
statements of cash flows.

In fiscal 2001 (ended March 31, 2002), OMRON began implementing "Grand Design 2010" (GD2010), a vision that sets the basic policies for management of the OMRON Group for the 10 years through fiscal 2010. In accordance with these basic policies, OMRON aims to become a "21st century company" by maximizing its corporate value over the long term, based on its basic philosophy of "working for the benefit of society." Aiming to be "Small but Global," as a management objective OMRON will work to be a profitable growth company that maximizes corporate value.

About OMRON Corporation

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 US (Chicago). For more information, visit OMRON's website at www.omron.com

Source: OMRON Corporation

Contact:

OMRON Corporation
Masaki Haruta, General Manager
Corporate Management Headquarters Accounting Group
Phone: [phone]

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