Slide 1: Presentation Materials for the Fiscal Year Ended March 31, 2021
Presentation Materials for the Fiscal Year Ended March 31, 2021 (Based on Japanese GAAP) May 14, 2021 Azbil Corporation RIC: 6845.T, Sedol: 6985543 © Azbil Corporation. All rights reserved.
Slide 2: Condolences regarding COVID-19
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 FY2020 4 2. Medium-term Plan for FY2021-2024 and New Long-term Targets 13 3. Financial Plan for FY2021 25 4. Returning Profits to Shareholders 29 Appendix 34 Notes 45 © Azbil Corporation. All rights reserved. 3
Slide 4: 1. Financial Results for FY2020
1. Financial Results for FY2020 © Azbil Corporation. All rights reserved. 4
Slide 5: Consolidated Financial Results
1. Financial Results for FY2020 Consolidated Financial Results Despite the difficult business environment in FY2020 due to stagnating economic activity resulting from the COVID-19 pandemic, we have been continuing engineering, installation and service operations as well as production activity to mai
Slide 6: Segment Information: BA Business
1. Financial Results for FY2020 Segment Information: BA Business Domestically, although some plans such as refurbishment projects were postponed, the impact of the COVID-19 pandemic has been limited. Demand related to urban redevelopment projects has unabated, and heightened interest has been shown
Slide 7: Segment Information: AA Business
1. Financial Results for FY2020 Segment Information: AA Business The stagnation of industrial activity caused by the COVID-19 pandemic as well as the resulting deterioration of the global economy have meant that during the year continued caution has been evident in capital investment by manufacturin
Slide 8: Segment Information: LA Business
1. Financial Results for FY2020 Segment Information: LA Business The Lifeline field (gas/water meters, etc.) depends on cyclical demand for meter replacement as required by law and thus market conditions can be expected to remain stable. However, LP gas meters have been in a period of low demand, re
Slide 9: Reference: Performance Trend by Segment
1. Financial Results for FY2020 Reference: Performance Trend by Segment ■ Orders received by segment ■ Sales by segment ■ Segment profit (operating income) (Billions of yen) (Billions of yen) (Billions of yen) (%) 300.0 300.0 30.0 15.0 250.0 250.0 25.0 12.5 200.0 200.0 20.0 10.0 150.0 150.0 15.0 7.5
Slide 10: Overseas Sales by Region
1. Financial Results for FY2020 Overseas Sales by Region Overseas sales increased by 1.6% from FY2019. The AA business (Billions of yen) (%) recorded higher sales thanks to robust semiconductor-related demand 50.0 25.0 and, from the second quarter, a recovery in demand—mainly in the manufacturing eq
Slide 11: Consolidated Financial Position
1. Financial Results for FY2020 Consolidated Financial Position Assets Total assets increased by 10.0 billion yen from the end of FY2019. As well as an increase in cash and deposits—a deliberate measure to ensure sufficient liquidity while the COVID-19 pandemic spread in Japan and overseas—this wa
Slide 12: Consolidated Cash Flows
1. Financial Results for FY2020 Consolidated Cash Flows Cash flows from operating activities decreased compared to FY2019. There was an increase in consumption tax payments following a tax rate revision. In addition, because FY2018 ended on a bank holiday, FY2019 included settlements of notes and
Slide 13: 2. Medium-term Plan for FY2021-2024 and New Long-term Targets
2. Medium-term Plan for FY2021-2024 and New Long-term Targets © Azbil Corporation. All rights reserved. 13
Slide 14: New Long-term Targets
2. Medium-term Plan for FY2021-2024 and New Long-term Targets New Long-term Targets Based on the Group philosophy of “human-centered automation,” the azbil Group strives to ensure its own sound growth over the medium to long term and sustainably increase its corporate value by contributing “in serie
Slide 15: New Medium-term Plan
2. Medium-term Plan for FY2021-2024 and New Long-term Targets New Medium-term Plan As part of the process of achieving the new long-term targets, we established our new medium-term plan. Focused on expansion in the three growth fields—namely, the new automation, environment and energy, and life-cycl
Slide 16: Three Growth Fields that Share a Common Foundation of Automation Technology
2. Medium-term Plan for FY2021-2024 and New Long-term Targets Three Growth Fields that Share a Common Foundation of Automation Technology The three growth fields, which share a common foundation of automation technology, will enable continuously carrying out “improvements to the quality of space and
Slide 17: Creating Enduring Solutions in the Three Growth Fields
2. Medium-term Plan for FY2021-2024 and New Long-term Targets 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 cont
Slide 18: Investments and Measures to Continuously Create Solutions
2. Medium-term Plan for FY2021-2024 and New Long-term Targets Investments and Measures to Continuously Create Solutions In order to continuously create solutions to achieve the new long-term targets for FY2030, we will implement vigorous R&D spending and capital investment to accelerate the developm
Slide 19: Segment Growth (BA, AA, LA) Leveraging the Changing Business Environment
2. Medium-term Plan for FY2021-2024 and New Long-term Targets 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 on development in the three growth fi
Slide 20: Overseas Growth Leveraging the Changing Business Environment
2. Medium-term Plan for FY2021-2024 and New Long-term Targets Overseas Growth Leveraging the Changing Business Environment Upgrade the business foundation to facilitate expansion; includes upgrading an overseas sales and service network, establishing/upgrading an overseas production and procuremen
Slide 21: Measures to Continuously Improve Profit Margins for Sustainable Growth
2. Medium-term Plan for FY2021-2024 and New Long-term Targets Measures to Continuously Improve Profit Margins for Sustainable Growth Under the previous medium-term plan, we implemented business and operational structure reforms to improve business profitability, and we were able to maintain a stea
Slide 22: The azbil Group's CSR Management: Contributing to Society's Sustainable Development
2. Medium-term Plan for FY2021-2024 and New Long-term Targets The azbil Group’s CSR Management: Contributing to Society’s Sustainable Development Business activities and growth that Through the new medium- term plan as well, we will contribute “in series” to the promote Group management achievement
Slide 23: Essential Goals of azbil Group for SDGs: New Targets and Updates
2. Medium-term Plan for FY2021-2024 and New Long-term Targets Essential Goals of azbil Group for SDGs: New Targets and Updates Based on our group philosophy, the azbil Group is engaged in implementing CSR management. Regarding SDGs, we have set our four own essential goals (I to IV) as well as speci
Slide 24: New Long-term Targets and New Medium-term Plan
2. Medium-term Plan for FY2021-2024 and New Long-term Targets New Long-term Targets and New 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 techno
Slide 25: 3. Financial Plan for FY2021
3. Financial Plan for FY2021 © Azbil Corporation. All rights reserved. 25
Slide 26: Consolidated Financial Plan
3. Financial Plan for FY2021 Consolidated Financial Plan In FY2021, the first year of the new medium-term plan, some impact is expected from a resurgence in the COVID-19 pandemic. However, as well as aiming to achieve business expansion in the three growth fields, we plan to increase net sales and p
Slide 27: Financial Plan by Segment
3. Financial Plan for FY2021 Financial Plan by Segment BA Demand for air conditioning (HVAC) control equipment and systems for large-scale buildings will remain high. Both sales and profits are expected to increase thanks to a healthy order backlog for new buildings and growing demand for the refu
Slide 28: Reference: Sales by Segment and Segment Profit (Operating Income)
3. 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) (%) 300.0 30.0 15.0 250.0 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 29: 4. Returning Profits to Shareholders
4. Returning Profits to Shareholders © Azbil Corporation. All rights reserved. 29
Slide 30: Plan to Further Improve Shareholders' Returns in Accordance with the Basic Policy
4. Returning Profits to Shareholders Plan to Further Improve Shareholders’ Returns in Accordance with the Basic Policy In line with our basic policy—promoting shareholder returns, investment Basic in growth and healthy financial foundation—we will increase dividend policy and repurchase the Company’
Slide 31: FY2020 Year-end Dividend and FY2021 Annual Dividend Plan
4. Returning Profits to Shareholders FY2020 Year-end Dividend and FY2021 Annual Dividend Plan FY2020 Regarding the dividend, which had been unchanged from FY2019 due to the uncertain business environment, because our year-end financial results have exceeded the published plan, dividend we will incre
Slide 32: Repurchase of Own Shares
4. Returning Profits to Shareholders Repurchase of Own Shares FY2021 Aiming to improve capital efficiency, and considering current and forecast business Repurchase performance, we will repurchase the Company’s own stock up to a maximum of of own stock 10 billion yen. Giving due consideration to the
Slide 33: Trend of Shareholders' Returns
4. Returning Profits to Shareholders Trend of Shareholders’ 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 5
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 Full-year plan for FY2021 ■ Capital expenditure, depreciation ■ R&D expenses, R&D expenses/Net sales ratio (Billions of yen) (Billions of yen) (%) 15.0 15.0 6.0 13.5 12.5 12.5 12.1 5.0 10.0 10.0 4.0 7.5 7.5 3.0 5.3 5.0 5.0 2.0 2.5
Slide 36: Solutions Combining the Three Growth Fields: Case 1
Solutions Combining the Three Growth Fields: Case 1 Environment and energy + Life-cycle solution Total energy management service case study In Providing energy management solutions to large commercial complexes and achieving service significant cost reductions With no initial investment required, si
Slide 37: Solutions Combining the Three Growth Fields: Case 2
Solutions Combining the Three Growth Fields: Case 2 New automation + Environment and energy NexfortTM DD*: cell-type HVAC system New product Solution for the “new normal” work styles required for exclusive office buildings even as remote work becomes commonplace New HVAC system is also suited to the
Slide 38: Solutions Combining the Three Growth Fields: Case 3
Solutions Combining the Three Growth Fields: Case 3 New automation + Life-cycle solution In Dx Valve Cloud Service: Cloud-based valve analysis and diagnosis case study service Harnessing DX to optimize maintenance and ensure safe and stable operation Pleased with how our Dx Valve Cloud Service facil
Slide 39: Solutions Combining the Three Growth Fields: Case 4
Solutions Combining the Three Growth Fields: Case 4 New automation + Life-cycle solution DX-EGA: Next-generation energy management business New Creating new value, including decarbonization and solutions to environmental issues, Business by making use of diverse measurement and metering data DX-EGA*
Slide 40: Contribution "In Series" to the Achievement of a Sustainable Society
Contribution “In Series” to the Achievement of a Sustainable Society Reduce 150 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 follow-u
Slide 41: Contribution to the Environment
Contribution to the Environment We will continue to reduce CO2 emissions at our customers’ sites through the BA, AA and LA businesses, and also work to reduce the environmental impact of our entire supply chain. Effective CO2 emission reduction at customers’ sites through our business FY2019 (Ended
Slide 42: Contribution to the Environment: 2050 Greenhouse Gas Reduction Vision
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 43: Progress of Corporate Governance Reforms
Progress of Corporate Governance Reforms Number of directors Composition of independent outside directors (People) Total number of directors Independent outside directors 12 11 11 10 9 9 9 45.5% 2019 45.5% 2020 5 out of 11 5 out of 11 6 5 5 54.5% 54.5% 4 3 3 3 0 2016 2017 2018 2019 2020 (Year) Indep
Slide 44: External Evaluation and Initiatives (as of April 2021)
External Evaluation and Initiatives (as of April 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 Empow
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