Azbil Corporation · TSE:6845
Azbil — H1 FY2022 Earnings Presentation
49 slides from Azbil's earnings presentation, Nov 8, 2022
Slide 1: Presentation Materials for the Second Quarter of Fiscal Year 2022
Presentation Materials for the Second Quarter of Fiscal Year 2022 (Ending March 31, 2023) (Based on Japanese GAAP) November 8, 2022 Azbil Corporation RIC: 6845.T, Sedol: 6985543 © Azbil Corporation. All rights reserved.
Slide 2: Highlights
Highlights 1. Consolidated Financial Results for the First Half of FY2022 Orders remained steady. Although orders received in the same period last year benefitted from the renewal of large multi-year service contracts, overall orders received increased by approximately 5%. Order backlog grew by 26
Slide 3: Contents
Contents 1. Consolidated Financial Results for the First Half of FY2022 4 2. Consolidated Financial Plan for FY2022 14 →Revised upwards from the initial plan (announced on May 13, 2022) 3. Returning Profits to Shareholders 20 →No revision from the most recent announcement 4. Progress Toward the Medi
Slide 4: 1. Consolidated Financial Results for the First Half of FY2022
1. Consolidated Financial Results for the First Half of FY2022 © Azbil Corporation. All rights reserved.
Slide 5: Consolidated Financial Results
1. Consolidated Financial Results for the First Half of FY2022 Consolidated Financial Results Orders received increased in Japan and overseas (Billions of yen) for the BA business, driven by urban redevelopment FY2021 FY2022 Difference Plan Difference projects in the Tokyo metropolitan area, and i
Slide 6: Segment Information: BA Business
1. Consolidated Financial Results for the First Half of FY2022 Segment Information: BA Business In the domestic market, demand has continued to grow for urban redevelopment projects in the Tokyo metropolitan area and for heating, ventilation, and air conditioning (HVAC) control equipment/systems for
Slide 7: Segment Information: AA Business
1. Consolidated Financial Results for the First Half of FY2022 Segment Information: AA Business Looking at how market trends in Japan and abroad have impacted our AA business segment, overall capital investment has continued at a high level, especially in the manufacturing equipment market, although
Slide 8: Segment Information: LA Business
1. Consolidated Financial Results for the First Half of FY2022 Segment Information: LA Business The Lifeline field, which includes gas (city gas, LP gas) and water meters, depends on cyclical demand for meter replacement as required by law. Though demand can be expected to remain stable, certain cha
Slide 9: Reference: Orders Received and Order Backlog by Segment
1. Consolidated Financial Results for the First Half of FY2022 Reference: Orders Received and Order Backlog by Segment Orders received by segment Order backlog by segment (Billions of yen) (Billions of yen) 200.0 200.0 175.0 175.0 150.0 150.0 125.0 125.0 100.0 100.0 75.0 75.0 50.0 50.0 25.0 25.0
Slide 10: Reference: Sales by Segment and Segment Profit (Operating Income)
1. Consolidated Financial Results for the First Half of FY2022 Reference: Sales by Segment and Segment Profit (Operating Income) Sales by segment Segment profit (operating income) (Billions of yen) (Billions of yen) (%) 175.0 20.0 20.0 17.5 17.5 150.0 15.0 15.0 125.0 12.5 12.5 100.0 10.0 10.0 7.
Slide 11: Overseas Sales by Region
1. Consolidated Financial Results for the First Half of FY2022 Overseas Sales by Region (Billions of yen) (%) Overseas sales rose by 11.7% on the same period last year. 30.0 25.0 Sales in China were lower because little progress was made in the recording of sales for some products due to parts procu
Slide 12: Consolidated Financial Position
1. Consolidated Financial Results for the First Half of FY2022 Consolidated Financial Position Assets Total assets decreased by 10.0 billion yen from the end of FY2021. This was due to a decrease in trade receivables, securities, and cash and deposits, despite an increase in inventories as well as
Slide 13: Consolidated Cash Flows
1. Consolidated Financial Results for the First Half of FY2022 Consolidated Cash Flows (Billions of yen) Cash flows from operating activities decreased FY2021 FY2022 Difference compared to the same period last year. This was due H1 H1 to a significant recording of trade receivables as well (A) (B)
Slide 14: 2. Consolidated Financial Plan for FY2022
2. Consolidated Financial Plan for FY2022 →Revised upwards from the initial plan (announced on May 13, 2022) © Azbil Corporation. All rights reserved.
Slide 15: Consolidated Financial Plan
2. Consolidated Financial Plan for FY2022 Consolidated Financial Plan Consolidated financial plan (announced on May 13, 2022) has been revised upwards Taking advantage of our growing order backlog, which reflects robust market demand, we will continue measures to address parts shortages, make steady
Slide 16: Progress in Countering the Shortages and Price Hikes of Parts
2. Consolidated Financial Plan for FY2022 Progress in Countering the Shortages and Price Hikes of Parts We are implementing measures to strengthen (1)capability to secure and procure parts/materials, (2)production capacity, and (3)profitability. Thanks to some measures we have implemented, there
Slide 17: Financial Plan by Segment (1)
2. Consolidated Financial Plan for FY2022 Financial Plan by Segment (1) We plan to set a new record for net sales in the second half by taking advantage of our significant buildup of order backlog, reflecting the robust state of orders. By steadily implementing measures to address the shortages
Slide 18: Financial Plan by Segment (2)
2. Consolidated Financial Plan for FY2022 Financial Plan by Segment (2) BA Because of the significant orders backlog and expanding demand, we expect to achieve sales in line with the initial plan; profits are expected to exceed the plan. Demand for HVAC control equipment/systems for new large-scal
Slide 19: Reference: Sales by Segment and Segment Profit (Operating Income)
2. Consolidated Financial Plan for FY2022 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 5.0 2.5 50.0 0.0 0.
Slide 20: 3. Returning Profits to Shareholders
3. Returning Profits to Shareholders →No revision from the most recent announcement © Azbil Corporation. All rights reserved.
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 in Basic policy growth and healthy financial foundation—we repurchase the Company’s own stock and increase divi
Slide 22: FY2022 Annual Dividend Plan
3. Returning Profits to Shareholders FY2022 Annual Dividend Plan FY2022 annual The Company plans to increase the annual dividend by 5 yen per share, to 65 yen per share. dividend Considering parts shortages, inflation, and other factors, the outlook for the global economic environment is expected
Slide 23: Repurchase of Own Stock and Cancellation of Treasury Shares
3. Returning Profits to Shareholders Repurchase of Own Stock and Cancellation of Treasury Shares Repurchase of own stock We repurchased the Company’s own stock of 9.9 billion yen (2.67 million shares). Cancellation of treasury We completed cancellation of 1.5 million of the Company’s treasury shares
Slide 24: 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) (%) 70.0 4.4 5.0 (plan) 65.0 4.2 4.5 3.9 4.0
Slide 25: 4. Progress Toward the Medium-term Plan
4. Progress Toward the Medium-term Plan © Azbil Corporation. All rights reserved.
Slide 26: Long-term Targets and Medium-term Plan
4. Progress Toward the Medium-term Plan Long-term Targets and Medium-term Plan The azbil Group previously defined three growth fields—new automation, environment and Long-term energy, and life-cycle solution—which share a common foundation of automation targets technology. Focusing on the growth of
Slide 27: Continuously Enhancing Profit Margins to Achieve Sustainable Growth
4. Progress Toward the Medium-term Plan Continuously Enhancing Profit Margins to Achieve Sustainable Growth Progress of measures to expand business: We have launched products that expand the measurement field (fast-response, high-precision mass flow controllers, etc.). Furthermore, to refine MEMS
Slide 28: Achieving Growth in Overseas Markets Using Opportunities Offered by a Changing Business Environment
4. Progress Toward the Medium-term Plan Achieving Growth in Overseas Markets Using Opportunities Offered by a Changing Business Environment Progress of measures to expand business: With the Strategic Planning & Development Office for Southeast Asia (Singapore) playing a central role, progress has
Slide 29: Three Growth Fields Sharing a Common Foundation of Automation Technology
4. Progress Toward the Medium-term Plan Three Growth Fields Sharing a Common Foundation of Automation Technology We are expanding business by focusing on three growth fields that address new societal and customer needs. In FY2022, we created the Green Transformation (GX)* Solution Department and
Slide 30: Expanding the Range of Solution-Focused Products: New Testing Facility Completed
4. Progress Toward the Medium-term Plan Expanding the Range of Solution-Focused Products: New Testing Facility Completed at the Fujisawa Technology Center The new buildings will help further boost development in advanced system solutions that use cloud computing and AI, as well as in high- perform
Slide 31: Business Environment and Progress of Measures within Each Business (BA/AA/LA)
4. Progress Toward the Medium-term Plan Business Environment and Progress of Measures within Each Business (BA/AA/LA) While responding to changes in the socioeconomic environment—such as the pandemic, parts procurement difficulties, and inflation—we will steadily implement measures contained in the
Slide 32: azbil Group Sustainability
4. Progress Toward the Medium-term Plan azbil Group Sustainability The azbil Group is committed to continuously enhancing enterprise value based on mutual trust with stakeholders, to realize “safety, comfort, and fulfillment” in people’s lives and contributing “in series” to a sustainable society. T
Slide 33: Essential Goals of azbil Group for SDGs
4. Progress Toward the Medium-term Plan Essential Goals of azbil Group for SDGs Regarding SDGs, we have set four of our 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 levels. Ⅰ
Slide 34: 5. The azbil Group's Exhibition Participation
５．The azbil Group’s Exhibition Participation © Azbil Corporation. All rights reserved.
Slide 35: Business Segments' Initiatives to Expand the Three Growth Fields
5. The azbil Group’s Exhibition Participation Business Segments’ Initiatives to Expand the Three Growth Fields Industrial Transformation ASIA-PACIFIC (ITAP) Event dates: October 18th to 20th, 2022 9:00AM–6:00PM Venue: Singapore EXPO Theme: A Sustainable Future through Digital Technology Video uplo
Slide 36: Appendix
Appendix © Azbil Corporation. All rights reserved.
Slide 37: Capital Expenditure, Depreciation and R&D Expenses
Capital Expenditure, Depreciation and R&D Expenses Full-year results/H1 results for FY2022 Full-year plan for FY2022 ■ Capital expenditure, depreciation ■ R&D expenses, R&D expenses/Net sales ratio (Billions of yen) (Billions of yen) (%) 15.0 15.0 6.0 13.3 14.3 (plan) (plan) 12.5 12.5 5.0 10.0 10.0
Slide 38: Daikin Industries: Employing CBM for Valves in Chemical Plants
Daikin Industries, Ltd. Employing CBM* (Condition Based Maintenance) for Valves in Chemical Plants Visualizing valve condition based on operating data; Condition-based maintenance as a key to realizing significant cost reductions The Kashima Plant operated by Daikin Industries supplies fluorochemica
Slide 39: Towa Nasu Resort: Adopting IoT for Water Meters Across a Vast Resort
Towa Nasu Resort Co., Ltd. Adopting IoT for Water Meters Across a Vast Resort IoT adopted for resort water meters spread over 8 million square meters; Realizing prompt leak detection and a lighter workload for meter readers The Nasu Highland, which covers almost 2,000 acres, can be found in the Nasu
Slide 40: Contribution "In Series" to the Achievement of a Sustainable Society
Contribution “In Series” to the Achievement of a Sustainable Society Reduce about 160 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: Transition to a Company with a Three-committee Board Structure
Transition to a Company with a Three-committee Board Structure Transition to a company with a three-committee board structure Aiming to promote further reforms in corporate governance, the Company transitioned to a company with a three-committee board structure (on June 23, 2022), ensuring the s
Slide 43: Revision of the Executive Remuneration System and Disclosure of Remuneration Policy
Revision of the Executive Remuneration System and Disclosure of Remuneration Policy With regard to our executive remuneration system, in order to add impetus to the realization of our long-term targets (to achieve by FY2030) and the medium-term plan (FY2021-FY2024), we will further increase both the
Slide 44: 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 12 11 11 11 10 9 8 33.3% 45.5% 2021 2022 5 out of 11 8 out of 12 6 5 5 5 54.5% 4 66.7% 3 0 2018 2019 2020 2021 2022 (Year)
Slide 45: 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 46: External Evaluation and Initiatives (as of October 2022)
External Evaluation and Initiatives (as of October 2022) ESG-related topics—Inclusion in ESG indexes, external evaluation and initiatives Five indexes adopted by the Government Pension Investment Fund (GPIF) of Japan FTSE Blossom Japan Index FTSE Blossom Japan Sector Relative Index MSCI Japa
Slide 47: Notes (1)
Notes (1) 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: Bui
Slide 48: Notes (2)
Notes (2) (from page 33) 1. Science-based targets: Greenhouse gas emission reduction targets that are consistent with scientific evidence. 2. The azbil Group’s own sustainable design principles: This design strives to create and provide products that contribute to solving global environmental issues
Slide 49: 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