Slide 1: Presentation Materials for the Fiscal Year Ended March 31, 2020
Presentation Materials for the Fiscal Year Ended March 31, 2020 (Based on Japanese GAAP) May 20, 2020 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 today find themselves in difficulty due to the pan
Slide 3: Contents
Contents 1. azbil Group Initiatives to Date, Aiming for New Growth P. 4 2. Financial Results for FY2019 P. 8 3. Returning Profits to Shareholders P.20 4. Operation for FY2020 P.25 5. Initiatives for sustainable growth P.27 Appendix P.40 Notes P.46 © Azbil Corporation. All rights reserved. 3
Slide 4: 1. azbil Group Initiatives to Date, Aiming for New Growth
1.azbil Group Initiatives to Date, Aiming for New Growth © Azbil Corporation. All rights reserved. 4
Slide 5: azbil Group Initiatives for Corporate Growth
1. azbil Group Initiatives to Date, Aiming for New Growth azbil Group Initiatives for Corporate Growth 2006 Adoption of the Group philosophy “human-centered automation” and the Group symbol “azbil” 2008 Group name changed to “azbil Group” 2012 Company name changed to “Azbil Corporation” Three
Slide 6: Aiming at New Growth
1. azbil Group Initiatives to Date, Aiming for New Growth Aiming at New Growth Major changes in the Changes of the business environment Technical innovation trends structure of society • Increasing globalization, responsibility • Declining birthrate, aging population, for sustainable development • C
Slide 7: Main Points
Main Points Looking back over the last two medium-term plans (FY2013-FY2019) and financial results and shareholders’ returns for FY2019 Progress achieved in strengthening business profitability, developing our global business foundation (sales/service network, technology development, production/
Slide 8: 2. Financial Results for FY2019
2. Financial Results for FY2019 © Azbil Corporation. All rights reserved. 8
Slide 9: Consolidated Financial Results
2. Financial Results for FY2019 Consolidated Financial Results There was an increase in orders received for the LA business, but the AA business performance remained sluggish owing to the overall downturn in markets for manufacturing equipment throughout the year. This resulted in an overall decre
Slide 10: Non-operating Income & Expenses, Extraordinary Income & Losses and Income Taxes
2. Financial Results for FY2019 Non-operating Income & Expenses, Extraordinary Income & Losses and Income Taxes Operating income increased compared with FY2018, but owing to the recording of foreign exchange losses on appreciation of the yen, ordinary income was on a par with FY2018. Net income
Slide 11: Segment Information - BA Business
2. Financial Results for FY2019 Segment Information - BA Business Thanks to urban redevelopment plans for the Tokyo metropolitan area, the market environment continued to be robust. There was a focus on securing orders with a view to enhanced profitability. Additionally, efforts were made to ensure
Slide 12: Segment Information - AA Business
2. Financial Results for FY2019 Segment Information - AA Business We are pursuing a growth strategy and implementing measures to strengthen profitability for the three AA business sub-segments*. Due to sluggish investment in markets related to manufacturing equipment, in Japan and overseas, sales an
Slide 13: Segment Information - LA Business
2. Financial Results for FY2019 Segment Information - LA Business The Lifeline field (gas/water meters, etc.) is a relatively stable business environment since it is focused on meeting cyclical meter replacement demand, as required by law. In the Life Science Engineering (LSE: pharmaceutical/laborat
Slide 14: Reference: Orders Received by Segment
2. Financial Results for FY2019 Reference: Orders Received by Segment (Billions of yen) 300.0 200.0 100.0 0.0 FY2016 FY2017 FY2018 FY2019 ■BA 120.0 117.8 123.7 122.9 ■AA 93.4 101.7 98.3 91.9 ■LA 42.6 48.0 43.8 44.8 Consolidated 254.9 266.2 264.2 258.0 © Azbil Corporation. All rights reserved. 14
Slide 15: Reference: Sales by Segment
2. Financial Results for FY2019 Reference: Sales by Segment (Billions of yen) 300.0 200.0 100.0 0.0 FY2016 FY2017 FY2018 FY2019 ■BA 116.4* * 120.2 119.5 123.7 ■AA 95.4 97.2 99.3 93.1 ■LA 44.1 44.2 44.8 44.0 Consolidated 254.8 260.3 262.0 259.4 * In December 2016, the Chinese subsidiary Beijing YTYH
Slide 16: Reference: Segment Profit (Operating Income)
2. Financial Results for FY2019 Reference: Segment Profit (Operating Income) (Billions of yen) 30.0 20.0 10.0 0.0 FY2016 FY2017 FY2018 FY2019 ■BA 11.5* 12.5 12.4 14.8 ■AA 7.2 9.9 12.2 10.4 ■LA 1.4 1.5 2.0 1.8 Consolidated 20.1 24.0 26.6 27.2 * In December 2016, the Chinese subsidiary Beijing YTYH In
Slide 17: Overseas Sales by Region
2. Financial Results for FY2019 Overseas Sales by Region Overseas, the CP business recorded lower (Billions of yen) (%) sales as the markets for manufacturing 50.0 25.0 equipment remained sluggish. Also, owing to the fall in orders received in the previous fiscal 40.0 20.0 year, LA business sales we
Slide 18: Consolidated Financial Position
2. Financial Results for FY2019 Consolidated Financial Position Assets Owing to a decrease in notes and accounts receivable-trade and securities for short-term investment, total assets were 274.5 billion yen, on a par with the end of FY2018, despite an increase in cash and deposits as well as an i
Slide 19: Consolidated Cash Flows
2. Financial Results for FY2019 Consolidated Cash Flows Cash flows from operating activities increased compared to FY2018. This was owing to increased collection of notes and accounts receivable-trade and the fact there had been expenditures related to the setting up of a retirement benefit trust
Slide 20: 3. Returning Profits to Shareholders
3. Returning Profits to Shareholders © Azbil Corporation. All rights reserved. 20
Slide 21: Basic Policy
3. Returning Profits to Shareholders Basic Policy We will continue to provide stable returns to shareholders while making steady progress with investments to drive future growth and thus increase enterprise value. Basic policy We continue to develop well-disciplined capital policies and aim to maint
Slide 22: Business Performance: Steadily Improving Profitability
3. Returning Profits to Shareholders Business Performance: Steadily Improving Profitability Substantial progress achieved in strengthening business profitability through business structural reforms and business operational reforms. We have progressively improved our business foundation to support
Slide 23: Trends of Shareholders' Returns: Maintaining Dividend Stability
3. Returning Profits to Shareholders Trends of Shareholders’ Returns: Maintaining Dividend Stability In accordance with our basic policy, we always maintain a stable dividend level while at the same time striving to raise it. The dividend per share and the number of own shares repurchased have bee
Slide 24: FY2019 and FY2020 Shareholders' Returns
3. Returning Profits to Shareholders FY2019 and FY2020 Shareholders’ Returns Ordinary dividend: annual dividend of 50 yen per share As announced FY2019 (increased by 4 yen) on May 10, 2019 Repurchase of own shares: 9.9 billion yen (3.71 million shares) Concluded Ordinary dividend: annual divid
Slide 25: 4. Operation for FY2020
4. Operation for FY2020 © Azbil Corporation. All rights reserved. 25
Slide 26: FY2020 Financial Plan and Business Operations
4. Operation for FY2020 FY2020 Financial Plan and Business Operations The FY2020 financial plan has not been finalized and thus is yet to be announced, but it is planned to maintain the FY2020 annual dividend at 50 yen per share. — Since it is currently difficult to calculate, on a rational basis,
Slide 27: 5. Initiatives for Sustainable Growth
5. Initiatives for Sustainable Growth © Azbil Corporation. All rights reserved. 27
Slide 28: Three Business Fields to Respond to the New Normal and New Social Issues
5. Initiatives for Sustainable Growth Three Business Fields to Respond to the New Normal and New Social Issues Based on the three fundamental policies, the azbil Group has been pursuing initiatives focused on three business fields that are expected to achieve sustainable growth. By accelerating effo
Slide 29: Understanding the Business Environment and Planning the azbil Group's Future Directions
5. Initiatives for Sustainable Growth Understanding the Business Environment and Planning the azbil Group’s Future Directions Based on our now enhanced business profitability and our achievements in upgrading our business foundation, we will closely follow technological trends – such as IoT, AI, a
Slide 30: Example of Development Involving the Three Business Fields (1)
5. Initiatives for Sustainable Growth Example of Development Involving the Three Business Fields (1) Increase azbil product appeal – accelerate automation, autonomy and labor saving, and achieve harmonization with human ingenuity Strengthen system solution development New system development and
Slide 31: Example of Development Involving the Three Business Fields (2)
5. Initiatives for Sustainable Growth Example of Development Involving the Three Business Fields (2) “Smart security solution” employing big data and AI Online anomaly monitoring system utilizes big data for online detection of possible anomalies in processes and equipment. Future variable forecas
Slide 32: Example of Development Involving the Three Business Fields (3)
5. Initiatives for Sustainable Growth Example of Development Involving the Three Business Fields (3) Pressure control for hospitals that enables safety, facilitates BCP, and allows flexible building use – Dual-use wards for normal and emergency situations at medical institutions designated for inf
Slide 33: Example of Development Involving the Three Business Fields (4)
5. Initiatives for Sustainable Growth Example of Development Involving the Three Business Fields (4) Strengthening solutions in the environmental/energy fields to utilize IoT technologies – Realizing a virtual power plant (VPP)* by leveraging our BA system track record for large buildings AutoDR i
Slide 34: Example of Development Involving the Three Business Fields (5)
5. Initiatives for Sustainable Growth Example of Development Involving the Three Business Fields (5) “as a Service” for social infrastructure Meter Data Cloud Service using smart gas and water meters Responding to changes in the business environment such as the liberalization of the energy market,
Slide 35: Key Points for Developing and Strengthening the Business Foundation
5. Initiatives for Sustainable Growth Key Points for Developing and Strengthening the Business Foundation Strengthening our business foundation (product development, production), our global foundation, and our management foundation (CSR management) Establishing an advanced global production and proc
Slide 36: Key Points for Developing and Strengthening the Business Foundation (Organization)
5. Initiatives for Sustainable Growth Key Points for Developing and Strengthening the Business Foundation (Organization) To foster product development with new automation and to realize direct contributions to a sustainable society, the following organizations were set up as a way to strengthen th
Slide 37: azbil Group CSR Management
5. Initiatives for Sustainable Growth azbil Group CSR Management Business Activities and Growth Directly Contributing to a Sustainable Society The azbil Group’s Guiding Principles and Code Code of Conduct were renewed as a Share- Sustainable holders society mechanism for sustainable growth. We Custo
Slide 38: Essential Goals of azbil Group for SDGs
5. Initiatives for Sustainable Growth Essential Goals of azbil Group for SDGs Business and General Corporate Activities Preserving the Earth’s environment and solving energy-related problems through cooperative creation Realizing a safe and comfortable society through new automation Solutions for en
Slide 39: Main Points (Summary)
Main Points (Summary) Looking back over the last two medium-term plans (FY2013-FY2019) and financial results & shareholders’ returns for FY2019 Progress achieved in strengthening our business profitability and financial position, and in developing our business foundation, management system and c
Slide 40: Appendix
Appendix © Azbil Corporation. All rights reserved. 40
Slide 41: Capital Expenditure, Depreciation and R&D Expenses
Capital Expenditure, Depreciation and R&D Expenses Capital expenditure, depreciation R&D expenses, R&D expenses/Net sales ratio (Billions of yen) (Billions of yen) (%) 9.0 15.0 6.0 7.5 12.5 11.7 5.0 6.0 10.0 4.0 4.9 4.4 7.5 3.0 4.5 3.0 5.0 2.0 1.5 2.5 1.0 0.0 0.0 0.0 FY2017*2 FY2018 2 FY2019 2 *
Slide 42: Contribution to the Environment
Contribution to the Environment Regarding greenhouse gas emissions (Scope 1 + 2)*1 associated with our own business activities, we have already launched specific initiatives. Aiming to achieve zero emissions by FY2050, we have developed our Long-term Vision for Reducing Greenhouse Gas Emissions, and
Slide 43: Contribution to the Environment: CO2 reduction at customers' sites
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. CO2 emission at customers’ sites through our business FY2018 (Ended March 31, 2019) CO2
Slide 44: 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 10 9 9 9 9 40% 2018 45.5% 2019 6 5 4 / 10 ５ / 11 4 54.5% 3 3 3 60% 3 0 2015 2016 2017 2018 2019 Inside Independent director
Slide 45: Evaluation from Society (as of March 31, 2020)
Evaluation from Society (as of March 31, 2020) Inclusion in ESG indexes and external evaluation 4 indexes adopted by the Government Pension Investment Fund (GPIF) of Japan FTSE Blossom Japan Index MSCI Japan ESG Select Leaders Index MSCI Japan Empowering Women Index (WIN) S&P/JPX Carbon Ef
Slide 46: 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 47: Notes
Notes 4. Change in accounting policy (adoption of International Financial Reporting Standard 16 Leases; hereafter, “IFRS 16”) Subsidiaries which apply the International Financial Reporting Standards have adopted IFRS 16 from the current consolidated fiscal year. Accordingly, lessees recognize all le
Slide 48: IR Inquiries
IR Inquiries Inquiries Regarding Investor Relations Azbil Corporation Investor Relations Phone: +81-3-6810-1031 Email: azbil-ir@azbil.com © Azbil Corporation. All rights reserved. 48