Slide 1: Presentation Materials for the Second Quarter of Fiscal Year 2021
Presentation Materials for the Second Quarter of Fiscal Year 2021 (Ending March 31, 2022) (Based on Japanese GAAP) November 2, 2021 Azbil Corporation RIC: 6845.T, Sedol: 6985543 © Azbil Corporation. All rights reserved.
Slide 2: COVID-19 condolences and gratitude
We would like to express our deepest condolences to those who have lost loved ones as a result of the novel coronavirus disease (COVID-19). We would also like to extend our sympathies to all those who have suffered from this disease and to those who have been experiencing hardships due to the pandem
Slide 3: Contents
Contents 1. Financial Results for the First Half of FY2021 4 2. Financial Plan for FY2021 15 →Revised upwards from the initial plan (announced on May 14, 2021) 3. Returning Profits to Shareholders 20 →No revision from the most recent announcement 4. Progress in Implementing the Medium-term Plan 24 5
Slide 4: 1. Financial Results for the First Half of FY2021
1. Financial Results for the First Half of FY2021 © Azbil Corporation. All rights reserved. 4
Slide 5: Consolidated Financial Results
1. Financial Results for the First Half of FY2021 Consolidated Financial Results Overall orders received grew, reversing the decline in the same period last year caused by the spread of COVID-19. This growth was mainly due to an increase in the AA business following a recovery in market conditions
Slide 6: Segment Information: BA Business
1. Financial Results for the First Half of FY2021 Segment Information: BA Business In the domestic market, demand has continued to grow for urban redevelopment projects, and there is growing interest in solutions related to ventilation improvement, energy savings, and CO2 reduction. Furthermore, the
Slide 7: Segment Information: AA Business
1. Financial Results for the First Half of FY2021 Segment Information: AA Business As regards market trends in Japan and abroad, expanding investment in 5G has led to steadily continued demand in the market for semiconductor manufacturing equipment. Although the effect of the COVID-19 pandemic and t
Slide 8: Segment Information: LA Business
1. Financial Results for the First Half of FY2021 Segment Information: LA Business The Lifeline field (gas/water meters, etc.) depends on cyclical demand for meter replacement as required by law and thus demands can be expected to remain stable. However, some changes have been observed, such as LP g
Slide 9: Reference: Orders Received by Segment
1. Financial Results for the First Half of FY2021 Reference: Orders Received by Segment (Billions of yen) 175.0 150.0 125.0 100.0 75.0 50.0 25.0 0.0 FY2018 FY2019 FY2020 FY2021 H1 H2 H1 H2 H1 H2 H1 ■BA 75.2 48.5 76.5 46.3 73.1 45.3 78.5 ■AA 50.3 48.0 45.0 46.8 42.6 44.8 53.2 ■LA 20.1 23.6 24.2 20.5
Slide 10: Reference: Sales by Segment
1. Financial Results for the First Half of FY2021 Reference: Sales by Segment (Billions of yen) 175.0 150.0 125.0 100.0 75.0 50.0 25.0 0.0 FY2018 FY2019 FY2020 FY2021 H1 H2 H1 H2 H1 H2 H1 ■BA 49.5 69.9 52.1 71.6 48.5 68.9 48.7 ■AA 47.7 51.6 44.8 48.2 41.7 46.0 45.7 ■LA 23.0 21.7 22.3 21.7 21.7 21.2
Slide 11: Reference: Segment Profit (Operating Income)
1. Financial Results for the First Half of FY2021 Reference: Segment Profit (Operating Income) (Billions of yen) (%) 20.0 20.0 17.5 17.5 15.0 15.0 12.5 12.5 10.0 10.0 7.5 7.5 5.0 5.0 2.5 2.5 0.0 0.0 FY2018 FY2019 FY2020 FY2021 H1 H2 H1 H2 H1 H2 H1 ■BA 1.1 11.2 2.9 11.8 2.5 11.4 1.9 ― Margin 2.4 16.0
Slide 12: Overseas Sales by Region
1. Financial Results for the First Half of FY2021 Overseas Sales by Region Overseas sales rose by 17.2% on the same period last year. (Billions of yen) (%) 25.0 25.0 Sales declined in Asia owing to continued sluggish investment because of the COVID-19 pandemic. However, mainly the AA business 20.0 2
Slide 13: Consolidated Financial Position
1. Financial Results for the First Half of FY2021 Consolidated Financial Position Seasonal factors affecting business typically lead to a decrease in the azbil Group’s assets and liabilities at the end of the first half compared to the end of previous fiscal year. Assets Total assets decreased by
Slide 14: Consolidated Cash Flows
1. Financial Results for the First Half of FY2021 Consolidated Cash Flows Net cash provided by operating activities increased compared with same period last year owing mainly to decreases in the payment of trade payables and bonuses. Net cash used in investing activities stood at 2.5 billion yen
Slide 15: 2. Financial Plan for FY2021
2. Financial Plan for FY2021 →Revised upwards from the initial plan (announced on May 14, 2021) © Azbil Corporation. All rights reserved. 15
Slide 16: Consolidated Financial Plan
2. Financial Plan for FY2021 Consolidated Financial Plan Consolidated financial plan (announced on May 14, 2021) has been revised upwards With a growing order backlog and a robust business environment, particularly in the manufacturing equipment market, it has been decided to revise upward the finan
Slide 17: Financial Plan by Segment (1)
2. Financial Plan for FY2021 Financial Plan by Segment (1) (Billions of yen) FY2020 FY2021 FY2021 Full year H1 H2 Full year Full year Difference Difference (results) (results) (revised plan) (revised plan) (initial plan) (Nov. 2, 2021) (Nov. 2, 2021) (May 14, 2021) (A) (B) (B) - (A) % Change (C) (B)
Slide 18: Financial Plan by Segment (2)
2. Financial Plan for FY2021 Financial Plan by Segment (2) we expect to achieve our full-year financial plan , by achieving growth in our refurbishment BA business for existing buildings in the second half. Demand for heating, ventilation, and air conditioning (HVAC) control equipment/systems for
Slide 19: Reference: Sales by Segment and Segment Profit (Operating Income)
2. Financial Plan for FY2021 Reference: Sales by Segment and Segment Profit (Operating Income) ■ Sales by segment ■ Segment profit (operating income) (Billions of yen) (Billions of yen) (%) 30.0 15.0 300.0 250.0 25.0 12.5 200.0 20.0 10.0 150.0 15.0 7.5 100.0 10.0 5.0 50.0 5.0 2.5 0.0 0.0 0.0 FY2018
Slide 20: 3. Returning Profits to Shareholders
3. Returning Profits to Shareholders →No revision from the most recent announcement © Azbil Corporation. All rights reserved. 20
Slide 21: Plan to Further Improve Shareholder Returns in Accordance with the Basic Policy
3. Returning Profits to Shareholders Plan to Further Improve Shareholder Returns in Accordance with the Basic Policy In line with our basic policy—promoting shareholder returns, investment Basic policy in growth and healthy financial foundation—we have repurchased the Company’s own stock and will in
Slide 22: FY2021 Annual Dividend Plan
3. Returning Profits to Shareholders FY2021 Annual Dividend Plan FY2021 In our business plan for FY2021, the first year of the medium-term plan, we are aiming to increase net sales and annual set a new record for profits. We will therefore increase the annual dividend by 5 yen to 60 yen per share. d
Slide 23: Trend of Shareholder Returns
3. Returning Profits to Shareholders Trend of Shareholder Returns The dividend per share has been retroactively revised, taking into account the effects of the 2-for-1 common stock split effective in 2018. (Yen) Dividend per share Dividend on equity (DOE) (%) 60.0 5.0 4.2 55.0 (plan) 4.5 4.0 3.9 50.
Slide 24: 4. Progress in Implementing the Medium-term Plan
4. Progress in Implementing the Medium-term Plan © Azbil Corporation. All rights reserved. 24
Slide 25: Long-term Targets and Medium-term Plan
4. Progress in Implementing the Medium-term Plan Long-term Targets and Medium-term Plan The azbil Group previously defined three growth fields—new automation, environment and New long-term energy, and the life-cycle solution—which share a common foundation of automation technology. Focusing on the
Slide 26: Three Growth Fields that Share a Common Foundation of Automation Technology
4. Progress in Implementing the Medium-term Plan Three Growth Fields that Share a Common Foundation of Automation Technology The three growth fields—new automation, environment and energy, and the life-cycle solution—share a common foundation of automation technology, will enable entry into various
Slide 27: Segment Growth (BA, AA, LA) Leveraging the Changing Business Environment
4. Progress in Implementing the Medium-term Plan Please see page 29 for progress in H1 of FY2021. Segment Growth (BA, AA, LA) Leveraging the Changing Business Environment We plan to achieve growth in each of the three businesses by launching new products and services in Japan and overseas, focused o
Slide 28: Creating Enduring Solutions in the Three Growth Fields
4. Progress in Implementing the Medium-term Plan Creating Enduring Solutions in the Three Growth Fields By combining the strengths of our three growth fields, we have developed solutions unique to the azbil Group that have already proven themselves on site to our customers. We will continue to creat
Slide 29: Progress in H1 of FY2021
4. Progress in Implementing the Medium-term Plan Progress in H1 of FY2021 Product development, production and service infrastructure to support solutions in the azbil Group’s three growth fields R&D Service network Production Fujisawa Technology Center: Maintenance and service sites in Japan a
Slide 30: Sustained Growth and Contribution "In Series" to the Achievement of a Sustainable Society
4. Progress in Implementing the Medium-term Plan Sustained Growth and Contribution “In Series” to the Achievement of a Sustainable Society By conducting corporate activities in accordance with Through the new medium- CSR-based management, we aim to create relationships term plan as well, we will of
Slide 31: Essential Goals of azbil Group for SDGs
4. Progress in Implementing the Medium-term Plan Essential Goals of azbil Group for SDGs Regarding SDGs, we have set our four own essential goals (I to IV) as well as specific targets, and we are now working to steadily implement them. Furthermore, we are continuously reviewing and raising their lev
Slide 32: 5. The azbil Group's Participation in Exhibitions
5. The azbil Group’s Participation in Exhibitions © Azbil Corporation. All rights reserved. 32
Slide 33: Segments' Initiatives Worldwide to Expand the Three Growth Fields
5. The azbil Group’s Participation in Exhibitions Segments’ Initiatives Worldwide to Expand the Three Growth Fields Thanks to online exhibitions that complement or replace real (physical) exhibitions, the azbil Group’s capabilities and initiatives in three growth fields can be viewed. Industrial Tra
Slide 34: Appendix
Appendix © Azbil Corporation. All rights reserved. 34
Slide 35: Capital Expenditure, Depreciation and R&D Expenses
Capital Expenditure, Depreciation and R&D Expenses Full-year results/H1 results for FY2021 Full-year plan for FY2021 ■ Capital expenditure, depreciation ■ R&D expenses, R&D expenses/Net sales ratio (Billions of yen) 53 (Billions of yen) (%) 15.0 15.0 6.0 13.5 12.1 12.5 12.5 5.0 10.0 10.0 4.0 7.5 7.5
Slide 36: Progress in H1 of FY2021
Progress in H1 of FY2021 (Rewritten from press releases; the dates within parentheses are when the announcements were made. ) Supplied products and services in the new automation fields, such as AI facility diagnosis and predictive anomaly detection that combine cloud services with AI technologies a
Slide 37: Progress in H1 of FY2021
Progress in H1 of FY2021 (Rewritten from press releases; the dates within parentheses are when the announcements were made. ) Supplied new products that expand the measurement field based on new technologies such as MEMS Azbil To Launch a High-Accuracy Mass Flow Controller with High-Speed Response
Slide 38: Progress in H1 of FY2021
Progress in H1 of FY2021 Optimized energy and quality of air/temperature control based on the totality of BA systems, IoT devices and field instruments At azbil we are creating systems suited to the new work styles and diversified office use New automation emerging as part of “new normal” life, pr
Slide 39: Progress in H1 of FY2021
Progress in H1 of FY2021 (Rewritten from press releases; the dates within parentheses are when the announcements were made. ) Measures to strengthen the business foundation and to improve profitability Strengthen our R&D system by constructing a new building at the Fujisawa Technology Center and i
Slide 40: Contribution "In Series" to the Achievement of a Sustainable Society
Contribution “In Series” to the Achievement of a Sustainable Society Reduce about 170 times of the CO2 (environmental burden) from business activities of azbil Group at customers’ sites By providing our customers with automation equipment/systems, energy management and other solutions, as well as fo
Slide 41: Contribution to the Environment
Contribution to the Environment Regarding greenhouse gas emissions (scopes 1+2)*1 associated with our own business activities, we have already launched specific initiatives. Aiming to achieve zero emissions by 2050, we have developed our long-term vision for reducing greenhouse gas emissions, and we
Slide 42: Progress of Corporate Governance Reforms (1)
Progress of Corporate Governance Reforms (1) Number of directors Composition of independent outside directors (People) Total number of directors Independent outside directors 12 11 11 11 10 9 9 45.5% 2020 45.5% 2021 5 out of 11 5 out of 11 6 5 5 5 54.5% 54.5% 4 3 3 0 2017 2018 2019 2020 2021 (Year)
Slide 43: Progress of Corporate Governance Reforms (2)
Progress of Corporate Governance Reforms (2) Skill matrix Sustainability • Disclosed skill matrix (2021) • In the medium-term plan, we recognize that addressing ‒ The Board of Directors at the meeting held on May 14, 2021 defined the skills sustainability is not simply a response to risk, but also a
Slide 44: External Evaluation and Initiatives (as of September 2021)
External Evaluation and Initiatives (as of September 2021) ESG-related topics—Inclusion in ESG indexes, external evaluation and initiatives Four indexes adopted by the Government Pension Investment Fund (GPIF) of Japan FTSE Blossom Japan Index MSCI Japan ESG Select Leaders Index MSCI Japan E
Slide 45: Notes
Notes 1. Financial data and financial statements have been prepared based on Japanese GAAP and the amounts have been rounded down. 2. The following are the azbil Group’s segments (each identified by abbreviation) together with the various sub-segments and their principal business fields. BA: Buildin
Slide 46: IR Inquiries and Disclaimer
IR Inquiries and Disclaimer Inquiries regarding investor relations Azbil Corporation Investor Relations Phone: +81-3-6810-1031 Email: azbil-ir@azbil.com Disclaimer The projections are based on management’s assumptions, intent and expectations in light of the information currently available to it, an