Azbil Corporation · TSE:6845
Azbil — H1 FY2023 Earnings Presentation
41 slides from Azbil's earnings presentation, Nov 7, 2023
Slide 1: Presentation Materials for the Second Quarter of Fiscal Year 2023
Presentation Materials for the Second Quarter of Fiscal Year 2023 (Ending March 31, 2024) (Based on Japanese GAAP) November 7, 2023 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 FY2023 Orders received declined owing to a stagnation of the factory automation (FA) market and some other causes. However, thanks to strengthened procurement and production capabilities, order backlog was steadily converted into sal
Slide 3: Contents
Contents 1. Consolidated Financial Results for the First Half of FY2023 4 2. Consolidated Financial Plan for FY2023 13 →Revised upwards from the initial plan (announced on May 12, 2023) 3. Returning Profits to Shareholders 18 →No revision from the most recent announcement Repurchase of own stock and
Slide 4: 1. Consolidated Financial Results for the First Half of FY2023
1. Consolidated Financial Results for the First Half of FY2023 © Azbil Corporation. All rights reserved. 4
Slide 5: Consolidated Financial Results
1. Consolidated Financial Results for the First Half of FY2023 Consolidated Financial Results Overall orders received decreased compared with the same period last year mainly because of a fall in the AA business due to a slump in the manufacturing equipment market. Net sales rose compared with t
Slide 6: Financial Results by Segment
1. Consolidated Financial Results for the First Half of FY2023 Financial Results by Segment Orders received increased in the BA business thanks to robust market conditions. However, the AA business saw a decrease owing to the impact of the slump in the manufacturing equipment market. The LA busine
Slide 7: Segment Information: BA Business
1. Consolidated Financial Results for the First Half of FY2023 Segment Information: BA Business Our view of the business environment — In the domestic market, demand has continued at a high level for urban redevelopment projects and for heating, ventilation, and air conditioning (HVAC) control equip
Slide 8: Segment Information: AA Business
1. Consolidated Financial Results for the First Half of FY2023 Segment Information: AA Business Our view of the business environment — In the process automation (PA) market, demand centering on maintenance and refurbishment has remained robust. In the FA market, however, demand has been sluggish owi
Slide 9: Segment Information: LA Business
1. Consolidated Financial Results for the First Half of FY2023 Segment Information: LA Business Our view of the business environment — The Lifeline field, which includes gas (city gas, LP gas) and water meters, depends on demand for meter replacement as required by law. Though demand can be expected
Slide 10: Overseas Sales by Region
1. Consolidated Financial Results for the First Half of FY2023 Overseas Sales by Region Overseas sales increased by 18.1% from the same period of FY2022 and accounted for 24.5% of net sales. AA business sales grew significantly in Asia and China, thanks to parts procurement difficulties no longe
Slide 11: Consolidated Financial Position
1. Consolidated Financial Results for the First Half of FY2023 Consolidated Financial Position Inventories increased owing to measures to secure parts/materials and strengthen our capabilities for procurement, while investment securities also increased due to the rise in market value of shareholdi
Slide 12: Consolidated Cash Flows
1. Consolidated Financial Results for the First Half of FY2023 Consolidated Cash Flows Free cash flow decreased mainly due to higher income tax payments and expenditures in capital investment, despite higher net cash flow from operating activities, reflecting increased income before income taxes,
Slide 13: 2. Consolidated Financial Plan for FY2023
2. Consolidated Financial Plan for FY2023 →Revised upwards from the initial plan (announced on May 12, 2023) © Azbil Corporation. All rights reserved. 13
Slide 14: Consolidated Financial Plan
2. Consolidated Financial Plan for FY2023 Consolidated Financial Plan To reflect our improved profitability and results in the first half of the year, we have revised our full-year financial plan for FY2023 upwards, continuing to aim to increase both revenue and profits for the third consecutive fis
Slide 15: Financial Plan by Segment (1)
2. Consolidated Financial Plan for FY2023 Financial Plan by Segment (1) In the BA business, figures for sales and segment profit have been revised upwards from the initial plan to reflect robust market conditions and improved profitability. In the AA business, although there is no significant de
Slide 16: Financial Plan by Segment (2)
2. Consolidated Financial Plan for FY2023 Financial Plan by Segment (2) Figures for sales and segment profit have been revised upwards from the initial plan to reflect robust market conditions BA and improved profitability. The domestic market has been robust, and is expected to remain so in FY202
Slide 17: Reference: Analysis on Changes in Operating Income
2. Consolidated Financial Plan for FY2023 Reference: Analysis on Changes in Operating Income We expect to record operating income higher than the initial plan due to revenue growth and successful measures to strengthen profitability, including cost pass-through, despite the impact of parts/materia
Slide 18: 3. Returning Profits to Shareholders
3. Returning Profits to Shareholders →No revision from the most recent announcement Repurchase of own stock and cancellation of treasury shares concluded © Azbil Corporation. All rights reserved. 18
Slide 19: 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 Basic policy In accordance with our basic policy—promoting shareholder returns, investment for growth and sound financial base—we have completed our repurchase of the Company’s own st
Slide 20: FY2023 Annual Dividend Plan
3. Returning Profits to Shareholders FY2023 Annual Dividend Plan FY2023 The Company plans to increase the annual dividend by 7 yen per share, to 73 yen per share. dividend As announced at the start of FY2023, the interim dividend is 36.50 yen per share, an increase of 4 yen per share. While the
Slide 21: 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 have completed repurchase of the Company’s own stock of 2.19 million shares for 9.9 billion yen. Cancellation of treasury We cancelled all the Company’s treasury shares thus ac
Slide 22: Trend of Shareholder Returns
3. Returning Profits to Shareholders Trend of Shareholder Returns In FY2023 it is planned to increase dividends for the ninth consecutive fiscal year. DOE is expected to be 4.7%. (Yen) (%) 4.7 80.0 Dividend per share Dividend on equity (DOE) (plan) 5.0 75.0 4.4 4.2 4.5 70.0 4.0 3.9 65.0 3.7 4.0 3.
Slide 23: 4. Progress Toward the Medium-term Plan
4. Progress Toward the Medium-term Plan © Azbil Corporation. All rights reserved. 23
Slide 24: Long-term Targets and Medium-term Plan
4. Progress Toward the Medium-term Plan Long-term Targets and Medium-term Plan The azbil Group defines three growth fields—new automation, environment and energy, and life-cycle solutions—which share a common foundation of Long-term targets automation technology. Focusing on the growth of these fiel
Slide 25: Focus Points of our Medium-term Plan—Transformation for Further Growth
4. Progress Toward the Medium-term Plan Focus Points of our Medium-term Plan—Transformation for Further Growth Initiatives for transformation to achieve growth by tracking changing customer business models/demand—resulting from structural changes in the business environment—and expanding the three g
Slide 26: Business Development Initiatives Involving Alliances and Investments with Other Companies
4. Progress Toward the Medium-term Plan Business Development Initiatives Involving Alliances and Investments with Other Companies × × Announced in Announced in October 2023 October 2023 By combining the foreign SCADA With a view to expanding solutions in the (Niagara Framework®) systems renewable en
Slide 27: 5. The azbil Group's Exhibition Participation
5. The azbil Group’s Exhibition Participation © Azbil Corporation. All rights reserved. 27
Slide 28: 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, 2023 9:00AM-6:00PM • Venue: Singapore EXPO • Theme: Innovative Automation for Sustaining Growth Smart
Slide 29: Appendix
Appendix • Performance Trend by Segment ・・・30 • Capital Investment, Depreciation and R&D Expenses ・・・32 • Three Growth Fields and Progress and Forecast by Segments for the Medium-term Plan ・・・33 • Business Development Initiatives Involving Alliances and Investments with Other Companies ・・・35 • The a
Slide 30: Performance Trend by Segment: Orders Received and Order Backlog
Appendix Performance Trend by Segment: Orders Received and Order Backlog ■ Orders received by segment ■ Order backlog by segment (Billions of yen) (Billions of yen) 200.0 200.0 150.0 150.0 100.0 100.0 50.0 50.0 0.0 0.0 FY2021 FY2022 FY2023 FY2021 FY2022 FY2023 H1 H2 H1 H2 H1 H1 H2 H1 H2 H1 ■BA 78.5
Slide 31: Performance Trend by Segment: Sales and Segment Profit
Appendix Performance Trend by Segment: Sales and Segment Profit ■ Sales by segment ■ Segment profit (operating income) (Billions of yen) (Billions of yen) (%) 200.0 25.0 25.0 20.0 20.0 150.0 15.0 15.0 100.0 10.0 10.0 50.0 5.0 5.0 0.0 0.0 0.0 FY2021 FY2022 FY2023 H1 H2 H1 H2 H1 FY2021 FY2022 FY2023 ■
Slide 32: Capital Investment, Depreciation and R&D Expenses
Appendix Capital Investment, Depreciation and R&D Expenses ■ Capital investment, depreciation ■ R&D expenses Full-year results/H1 results for FY2023 Full-year plan for FY2023 (Billions of yen) (Billions of yen) (%) 15.0 15.0 6.0 12.5 12.5 5.0 10.0 10.0 4.0 7.5 7.5 3.0 5.9 5.0 5.0 2.0 3.8 2.9 2.5 2.5
Slide 33: Initiatives in Three Growth Fields and Application to Each Business Segment
Appendix Initiatives in Three Growth Fields and Application to Each Business Segment Three Growth Fields New Automation Field Providing distinctive solutions through our business in the three growth fields in which the Expanding sales by providing solutions that meet new demands azbil Group possesse
Slide 34: Progress and Forecast by Segments for the Medium-term Plan
Appendix Progress and Forecast by Segments for the Medium-term Plan While responding rapidly to changes in the social and business environment—such as pandemics, parts procurement difficulties, and inflation—and reviewing necessary measures, we will aim to achieve sustainable growth by tracking em
Slide 35: Alliance with X1Studio Co., Ltd.
Appendix Business Development Initiatives Involving Alliances and Investments with Other Companies (1) Alliance with X1Studio Co., Ltd. New business alliance between Azbil and X1Studio aimed × at expanding the foreign data center business in Japan (announced on October 6, 2023) In order to achieve
Slide 36: Alliance with Forest Energy Inc.
Appendix Business Development Initiatives Involving Alliances and Investments with Other Companies (2) Alliance with Forest Energy Inc. Azbil and Forest Energy form capital alliance aimed at Energy systems based on the concept of local expanding solutions in the renewable energy field consumption
Slide 37: The azbil Group's Materiality and its Goals and Targets
Appendix The azbil Group’s Materiality and its Goals and Targets The azbil Group has established five categories and ten items of the materiality and has set unique and specific SDGs targets to achieve them. By placing the targets on a management cycle that includes formulation, implementation, repo
Slide 38: Initiatives Contributing "in series" to the Environment
Appendix Initiatives Contributing “in series” to the Environment 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 follow
Slide 39: 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 40: Notes (2)
Notes (2) (from page 37) 1. Science-based targets: Greenhouse gas emission reduction targets based on scientific evidence 2. The azbil Group’s own sustainable design principles: This design is aimed at creating and providing products that contribute to solving global environmental issues (decarboniz
Slide 41: 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