OMRON Announces Representative Directors Changes

So first, we want to invite Mr. Yamada to briefly speak on this announcement. Good afternoon, everyone. I am President and thank you for taking your time out of your busy schedule and also for coming to this press conference today on such a short notice. I also would like to thank all of you who are joining us. As the MC just introduced, let me first share the contents of the resolution and its background. So at first, let me share the details of the decision. At the board of directors meeting today, the decision was made to step down from the roles of President and CEO at the end of March of this year, and then Mr. Tsujinaka to assume the role of President and CEO effective April 1. I will retire from the board of directors and become an honorary advisor at the shareholders meeting. So these are the resolutions the board of directors meetings made today. Please also allow me to share more context on these decisions. I have been President and CEO since 2011, and this year is the 12th year. The Great East Japan earthquake happened in the first year of my role. Since then, turbulent years including sharp appreciation of Japanese yen, U.S.-China tensions, and the spread of Novel COVID-19 virus. We went through these years, and last year, finally, we launched a new long-term vision for 2030. We are expecting to achieve record results in fiscal 2022, the first year of the vision, so we are making an excellent start towards the next 10 years. OMRON has become stronger by overcoming many challenges. I realized that we are facing new opportunities in the next phase. Of course, we are now moving to the next phase, and now we have seen many leaders through these years. So that's why I decided that now is the time to have these new leaders take the role and lead the company, and I proposed my resignation to the CEO selection advisory. Mr. Tsujinaka is the best candidate for the next CEO. We went over the selection process for many years, and we thought he was the best option. Basically, three key points: management style is very hands-on and he's widely respected. Second, he fully embodies OMRON principles. And thirdly, he is a leader who has demonstrated the ability to achieve targets. He is going to introduce himself later on. Mr. Tsujinaka has consistently worked in IAB. There's no other person who embodies the practice of such a customer-first approach within OMRON. He leads the business by staying close and listening to the voices of the field to solve our customer and social issues. He's assuming the role of President since 2021. He increased sales as well, and he's very trusted by the employees. And so we believe he was the qualified person based on his own experiences. So since he became the president in two years, he increased the sales almost by 1.5 times more in IAB, approximately about 1.6 times more, so he achieved a strong growth of the business. He would be able to further develop that company. So those are the reasons why we chose him to be the next leader. That's what I wanted to share about this announcement. So now I want to invite Mr. Tsujinaka to give us some remarks.

Thank you very much for coming out of your busy schedule. I really appreciate your participation. Thank you very much. As mentioned by President Tsujinaka, so at this meeting to be held in this coming June, I will retire from the chairman and I will assume the role of honorary advisor. Back in 2013, since I became the chairman of the board of directors, I have been dedicated to representing our shareholders by providing the review and oversight of the company operations. We revised all our principles in 2015 and implemented the OMRON principles. We had missionary dialogues which occurred 55 times globally for our global employees. That would be the number that I will have this session through the end of 2022. And also receiving the support from shareholders, we have also incorporated the practice of corporate philosophy into the Articles of Incorporation. So through all these different activities in the business world and also the public services, I think we were able to contribute to the development of OMRON so that OMRON can contribute to society. I think we were able to contribute to society so it can be a better society through the business activities. I think we are taking a step closer towards that. OMRON has been present since 2011. So OMRON has worked to resolve social issues through its business activities under the management based on OMRON principles. As a result, the market capital now increased by four times more, and OMRON is included in topics index all the time, so has contributed to the creation of social value. ESG commitments at the same time, because we are also included in the Dow Jones sustainability index as a world-class company. Basically, we are selected for six consecutive years in a row. OMRON has become a highly regarded company of the global community under Mr. Yamada's leadership. So last year, the new long-term vision for 2030 called 'Innovative Automation' was launched. So OMRON has started moving into the next era in order to further accelerate the growth for the future. I think we will need the next generation leaders with new values and ideas that are free from the past experiences of success. There was an agreement between us and also Mr. Yamada, and I want to place my trust in Mr. Tsujinaka to guide OMRON. And as an honorary advisor, I will continue playing a role to implement OMRON philosophy. Also externally, I'll continue the business and public service activities at the same time. But I will step back from the management but will continue to support the new leadership in the coming years as well. Thank you very much.

So in closing, I'd like to say a few words. So it's been 12 years since I assumed the position of the president in 2011, and there have been many ups and downs. I think we've passed through them in a blink of an eye, but these 12 years have been marked by turbulence. I'm proud to say that I've been able to practice management centered on our corporate philosophy. I think our employees and directors worked very hard and supported me. I'm fully filled with gratitude, and above all for Mr. Takeuchi's guidance over the past 12 years, without which I would not have been able to continue. And now I am taking on a new position to continue supporting the corporate governance so that I can have major expectations of the market to help contribute in increasing the corporate value. That is, so it's not easy to sustainably develop a company under this uncertain business environment, but OMRON has many assets, especially technologies and human resources, that have been developed over its long history. So I'm confident that the new president, Mr. Tsujinaka, will lead OMRON as the leader of Team OMRON and strive to solve social issues through our business. And we look forward to your continued support and guidance. Thank you very much for your support over the many years. Thank you so much.

Your question is about the key focus. And regarding SF 2030, we have a very clear strategy and we started the first year already, and we are getting a good reaction, I mean a good result of the first year, and we think all we need to do is continue executing this strategy that we've set out in this vision. That's why we're reinforcing our execution capability. So the second question, what I'm going to do, that's the first item. So I've been focused on the customer or the field, so first people on the field, also all the stakeholders. I want to have more dialogues with all these people on the field so they get to know me so they can trust me. That will be my answer. Thank you.

In my explanation earlier, Mr. Tsujinaka has been the leader who's quite in or who's practicing the customer-first, field-oriented approaches. For example, the IAB business sales have grown by 1.6 times more for the last two years. Because for the last two years, there's been a COVID situation and there's been lockdown in many cities and there's part shortage, many different changes he faced. And every time he faced those challenges or problems, he went to the production floor, also sales field, also procurement field. He tried to communicate with the key persons in those areas, he faced them, he listened to them, and he tried to solve the problems on the field in order to achieve the target. So naturally, information and people gathered around him, and that's why he has demonstrated that. And because of that, I felt the very first reason of choosing him was really realized by him.

Let me answer your question. About 17 years ago, in 2006, on May 10th, on a founding day, then we announced that in the future, the center piece of the business management is not going to be the family member but it will be placed on the corporate philosophy. That's the announcement made by chairman at that time. So since then, in running the board, executive side strategies were mainly focused, and we will be supervising, monitoring, and supervising such execution. And if those active members are capable of executing corporate philosophy, it didn't really matter whether the board was the founding family members or non-family founding family members. So that's why I decided to retire from this board member position.

My motto is to place importance on the field, the customers in the field, because everything starts from the front of the field. That's what I always have in my mind, and I want to continue having this concept. And my favorite phrase is my founder's words: 'To feel happy.' And I always share this wording whenever we have a new member joining the company. And there are many things going on around the world, so now I find the importance of these words and phrases more under this turbulent environment. And so I want to place importance on such a wording, a phrase made by the founder, in running the business in the future as well.

So on weekends, I do walk a lot. I walk around 10 kilometers or even up to 15 kilometers a day, just keep walking. Because there are many sightseeing spots in Kyoto, so I can go around many different sites and spots and just keep walking the whole day and refresh myself to be ready for the next week. That's my routine.

So looking back the past 12 years, there were many things that happened. I did not have much experience, I was young. I thought over what needs to be focused in running the business, and then I came to this corporate philosophy and also the spirit of founding period. And I decided to focus on its philosophy in running a business. And there are four business companies, all of them do exist to solve the social problems through businesses. And to respond to myself to your second question, the most impressive moment or there are many happy moments at the same time, but recent years, under the last three years under the COVID situation, all the efforts made by the employees were very impressive, and I really appreciate the efforts. Even under lockdown, some employees stayed at the factory and to continue running a production, there were many of such employees, and that helped to support continuing running a business. Also under a very difficult situation, the controller for factory automation, sensors, and motors were all leveraged and utilized to come up with an artificial respirator for emergency use to save the lives of many people. There were such a member in this team. So I was quite impressed with such an effort by our employees, and I'm very proud of such OMRON members. Thank you.

Under this current business environment surrounding factory automation, as you all know, it's very uncertain and that's still continuing and the future still remains to be uncertain. But we have accumulated experiences and technologies and all the knowledge we've gained, and there are many areas where we can exercise and leverage on such technologies. And we are here to solve social problems, and we want to continue challenging on that concept. I know the environments are quite tough, but we want to take this opportunity as the opportunities to continue making improvement. In response to the second question, in Europe, I spent two years in Germany actually, and I was involved in the marketing activities for sensors. That was my first experience to stay outside of Japan. Also, German language, I was not able to read Germans at all, so I struggled a lot in my life rather than the work. Shopping at the supermarkets, I struggled a lot. So rather than the job, I have much more a bigger impression about my life back then. Thank you.