Slide 1: Presentation Materials for the First Half of Fiscal Year 2020
Presentation Materials for the First Half of Fiscal Year 2020 (Ending March 31, 2021) (Based on Japanese GAAP) November 5, 2020 Azbil Corporation RIC: 6845.T, Sedol: 6985543 © Azbil Corporation. All rights reserved.
Slide 2: COVID-19 condolences and sympathies
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 FY2020 4 2. Financial Plan for FY2020 15 3. Returning Profits to Shareholders 19 4. Future Directions 22 5. The azbil Group’s Participation in Exhibitions 30 Appendix 31 Notes 38 © Azbil Corporation. All rights reserved. 3
Slide 4: 1. Financial Results for the First Half of FY2020
1. Financial Results for the First Half of FY2020 © Azbil Corporation. All rights reserved. 4
Slide 5: Consolidated Financial Results
1. Financial Results for the First Half of FY2020 Consolidated Financial Results Orders received decreased for the Advanced Automation (AA) business due to sluggish market conditions caused by the COVID-19 pandemic. Orders received were also down for the Building Automation (BA) business—reflectin
Slide 6: Segment Information: BA Business
1. Financial Results for the First Half of FY2020 Segment Information: BA Business The market environment in Japan has continued to be robust thanks to urban redevelopment projects in the Tokyo metropolitan area; the spread of COVID-19 has led to some temporary delays in construction work, but the e
Slide 7: Segment Information: AA Business
1. Financial Results for the First Half of FY2020 Segment Information: AA Business Growth strategies and measures to strengthen profitability were developed based on the three AA business sub-segments*. Burgeoning 5G-related investment led to continued demand in markets for semiconductor manufacturi
Slide 8: Segment Information: LA Business
1. Financial Results for the First Half of 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 reaching the end of t
Slide 9: Reference: Orders Received by Segment
1. Financial Results for the First Half of FY2020 Reference: Orders Received by Segment (Billions of yen) 175.0 150.0 125.0 100.0 75.0 50.0 25.0 0.0 FY2017 FY2018 FY2019 FY2020 H1 H2 H1 H2 H1 H2 H1 ■BA 73.2 44.5 75.2 48.5 76.5 46.3 73.1 ■AA 52.2 49.5 50.3 48.0 45.0 46.8 42.6 ■LA 24.5 23.4 20.1 23.6
Slide 10: Reference: Sales by Segment
1. Financial Results for the First Half of FY2020 Reference: Sales by Segment (Billions of yen) 175.0 150.0 125.0 100.0 75.0 50.0 25.0 0.0 FY2017 FY2018 FY2019 FY2020 H1 H2 H1 H2 H1 H2 H1 ■BA 50.8 69.3 49.5 69.9 52.1 71.6 48.5 ■AA 46.2 51.0 47.7 51.6 44.8 48.2 41.7 ■LA 21.4 22.7 23.0 21.7 22.3 21.7
Slide 11: Reference: Segment Profit (Operating Income)
1. Financial Results for the First Half of FY2020 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 FY2017 FY2018 FY2019 FY2020 H1 H2 H1 H2 H1 H2 H1 ■BA 2.3 10.2 1.1 11.2 2.9 11.8 2.5 ― Margin 4.5 14.8
Slide 12: Overseas Sales by Region
1. Financial Results for the First Half of FY2020 Overseas Sales by Region (Billions of yen) (%) Overseas, AA business sales grew thanks to 25.0 25.0 increased semiconductor-related demand, and the LA business also achieved growth. Overall 20.0 20.0 sales were thus 1.0% higher than the same period l
Slide 13: Consolidated Financial Position
1. Financial Results for the First Half of FY2020 Consolidated Financial Position Assets Although cash and deposits increased, notes and accounts receivable-trade decreased, resulting in an overall decrease of 11.7 billion yen from the previous fiscal year-end. Liability Total liabilities decrea
Slide 14: Consolidated Cash Flows
1. Financial Results for the First Half of FY2020 Consolidated Cash Flows Cash flows from operating activities decreased compared with the same period last year. This was mainly because of a decrease in operating income, an increase of consumption tax payment due to tax rate revision, and also bec
Slide 15: 2. Financial Plan for FY2020
2. Financial Plan for FY2020 © Azbil Corporation. All rights reserved. 15
Slide 16: Consolidated Financial Plan
2. Financial Plan for FY2020 Consolidated Financial Plan Consolidated financial plan (announced on August 6, 2020) has been revised upwards While there is no change to our assumption*1 on which we based our plan announced on August 6, 2020, we have revised our consolidated financial plan upwards. Th
Slide 17: Financial Plan by Segment
2. Financial Plan for FY2020 Financial Plan by Segment BA It is anticipated that revenue and profits will be lower this year. This is because of the fact that the results for the previous financial year were at a high level and there have been curbs on investment and postponed plans in certain mar
Slide 18: Reference: Sales by Segment and Segment Profit (Operating Income)
2. Financial Plan for FY2020 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 FY2017
Slide 19: 3. Returning Profits to Shareholders
3. Returning Profits to Shareholders © Azbil Corporation. All rights reserved. 19
Slide 20: FY2020 Shareholders' Returns
3. Returning Profits to Shareholders FY2020 Shareholders’ Returns FY2020 dividend plan (No change from the initial plan) As announced on May 20, Azbil plans to issue an annual dividend of 50 yen per share (both interim and year-end dividends to be 25 yen per share) While the global spread of COVID
Slide 21: 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 have continued to maintain a stable dividend level while at the same time striving to raise it. The dividend per share has been retroactively revised, taking
Slide 22: 4. Future Directions
4. Future Directions © Azbil Corporation. All rights reserved. 22
Slide 23: Direction and Long-term Goals of azbil Group Development
4. Future Directions Direction and Long-term Goals of azbil Group Development The United Nation’s Sustainable Development Goals (SDGs) will serve as new guideposts to indicate for management the direction of Group development globally. While continually striving to attain our long-term goals, we wil
Slide 24: Approach to Business Management
4. Future Directions Approach to Business Management With the added impact of the COVID-19 pandemic, society and industry are undergoing major changes, as are the needs of each. This situation is revealing various issues that must be solved, as well as giving rise to new issues that demand solutio
Slide 25: Business Environment and Strategies (1)
4. Future Directions Business Environment and Strategies (1) No changes are anticipated in continued work on the large-scale redevelopment projects in the BA Tokyo metropolitan area from 2021, or in the robust demand forecast for numerous refurbishment projects for existing buildings. Moreover, fr
Slide 26: Business Environment and Strategies (2)
4. Future Directions Business Environment and Strategies (2) Uncertainty still surrounds capital investment in the manufacturing industries. AA However, with labor shortages, environmental measures, productivity improvements, and changing work styles (telecommuting, etc.), we anticipate continued
Slide 27: Business Environment and Strategies (3)
4. Future Directions Business Environment and Strategies (3) The Lifeline field (gas/water meters) mainly depends on stable demand for meter replacement as LA required by law. There is also new demand, such as for our Meter Data Cloud Service based on smart technology. In the Life Science Engineer
Slide 28: Progress with Upgrading and Strengthening the Business Foundation (1)
4. Future Directions Progress with Upgrading and Strengthening the Business Foundation (1) Expanding/strengthening our global production and procurement systems: Dalian Factory, China Scheduled to build a new factory building at Azbil Control Instruments (Dalian) in order to expand production capaci
Slide 29: Progress with Upgrading and Strengthening the Business Foundation (2)
4. Future Directions Progress with Upgrading and Strengthening the Business Foundation (2) Management and Activities that contribute “in series” to the achievement of a sustainable society Newly establish targets (below) related to SDGs, including effective reduction of CO2 at customer’s sites D
Slide 30: Introducing our capabilities in the digital content domain
5. The azbil Group’s Participation in Exhibitions Introducing our capabilities in the digital content domain Thanks to online exhibitions that complement or replace real (physical) exhibitions, the azbil Group’s capabilities can be viewed and appreciated even after the event is over. Industrial Tran
Slide 31: Appendix
Appendix © Azbil Corporation. All rights reserved. 31
Slide 32: Capital Expenditure, Depreciation and R&D Expenses
Capital Expenditure, Depreciation and R&D Expenses Full-year results/H1 results for FY2020 Full-year plan for FY2020 Capital expenditure, depreciation R&D expenses, R&D expenses/Net sales ratio (Billions of yen) (Billions of yen) (%) 9.0 15.0 6.0 11.6 (plan) 7.5 12.5 5.0 6.0 10.0 4.0 4.5 4.6 (pl
Slide 33: 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 54.5% 54.5% 6 5 5 4 3 3 3 0 Independent Inside directors 2016 201
Slide 34: azbil Group CSR Management
azbil Group CSR Management Business activities and growth that contribute "in series" to the achievement of a sustainable society The azbil Group’s Guiding Principles and Code Share- Sustainable of Conduct were renewed as a mechanism holders society for sustainable growth. We are aiming to Customers
Slide 35: 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
Slide 36: 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 reduction at customers’ sites through our business FY2019 (Ended March 31,
Slide 37: Issuer Ratings of Azbil Corp.
Issuer Ratings of Azbil Corp. 1. Oct. 16, 2020: Rating and Investment Information, Inc. (R&I) raised the issuer rating of Azbil Corp. to “A+”. Name Rating Rating outlook Issuer rating Ａ ⇒ Ａ＋ Stable Evaluation points: Stable revenue sources, such as maintenance and services, represent a comparative
Slide 38: 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 39: 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