Slide 1: Presentation Materials for the Fiscal Year Ended March 31, 2024
Presentation Materials for the Fiscal Year Ended March 31, 2024 (Based on Japanese GAAP) May 13, 2024 Azbil Corporation RIC: 6845.T, Sedol: 6985543 © Azbil Corporation. All rights reserved.
Slide 2: Highlights
Highlights 1. Consolidated Financial Results for FY2023 We achieved record consolidated financial results for the third consecutive fiscal year, with increased revenue and profits. • Orders received declined owing to stagnation of the factory automation (FA) market and other factors. However, than
Slide 3: Contents
Contents 1. Consolidated Financial Results for FY2023 4 2. Consolidated Financial Plan for FY2024 13 3. Returning Profits to Shareholders 17 4. Progress in Implementing the Medium-term Plan 22 Appendix 33 Notes 44 © Azbil Corporation. All rights reserved. 3
Slide 4: 1. Consolidated Financial Results for FY2023
1. Consolidated Financial Results for FY2023 © Azbil Corporation. All rights reserved. 4
Slide 5: Consolidated Financial Results
1. Consolidated Financial Results for FY2023 Consolidated Financial Results Orders received decreased compared with FY2022 mainly because of a fall in the AA business due to a slump in the FA market. Net sales rose compared with FY2022 and exceeded the plan. This reflects steady progress made wi
Slide 6: Financial Results by Segment
1. Consolidated Financial Results for FY2023 Financial Results by Segment ■ BA: In FY2022 multi-year service contracts were renewed and orders were received for large-scale projects. However, in FY2023, against the backdrop of a robust business environment, orders received were at the same level as
Slide 7: Segment Information: BA Business
1. Consolidated Financial Results for FY2023 Segment Information: BA Business Our view of the business environment — In the domestic market, demand has continued at a high level for office buildings included in urban redevelopment projects, and for heating, ventilation, and air conditioning (HVAC) c
Slide 8: Segment Information: AA Business
1. Consolidated Financial Results for FY2023 Segment Information: AA Business Our view of the business environment — In the FA market, conditions remain sluggish in the manufacturing equipment market, but progress is being made with adjusting inventory, which had expanded considerably as a result of
Slide 9: Segment Information: LA Business
1. Consolidated Financial Results for 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 to remain basical
Slide 10: Overseas Sales by Region
1. Consolidated Financial Results for FY2023 Overseas Sales by Region Overseas sales increased by 7.5% from FY2022 and accounted for 23.1% of net sales. The BA business achieved considerable sales growth, principally in Asia. Owing to sluggish conditions in the FA market, AA business sales were
Slide 11: Consolidated Financial Position
1. Consolidated Financial Results for FY2023 Consolidated Financial Position Assets : Total assets increased due to continued growth in inventories—as a result of measures taken to secure parts/materials to ensure an uninterrupted supply of products, in the face of supply chain disruptions— and al
Slide 12: Consolidated Cash Flows
1. Consolidated Financial Results for FY2023 Consolidated Cash Flows Free cash flow increased by 14.0 billion yen compared to FY2022. The background to this is that cash flow increased compared to FY2022 owing to a significant rise in trade receivables in FY2022. An additional factor was the inc
Slide 13: 2. Consolidated Financial Plan for FY2024
2. Consolidated Financial Plan for FY2024 © Azbil Corporation. All rights reserved. 13
Slide 14: Consolidated Financial Plan
2. Consolidated Financial Plan for FY2024 Consolidated Financial Plan We plan to increase both net sales and operating income for the fourth consecutive fiscal year under the current medium-term plan. The BA business environment is expected to remain robust. In the AA business, inventory adjustmen
Slide 15: Financial Plan by Segment (1)
2. Consolidated Financial Plan for FY2024 Financial Plan by Segment (1) ■ BA: We expect increased revenue against the backdrop of a robust business environment and our large order backlog. Despite facing the soaring cost of outsourcing and increased expenses, by increasing margins at the point of or
Slide 16: Financial Plan by Segment (2)
2. Consolidated Financial Plan for FY2024 Financial Plan by Segment (2) We expect increased revenue against the backdrop of a robust business environment and our large order backlog. Despite facing BA the soaring cost of outsourcing and increased expenses, by increasing margins at the point of order
Slide 17: 3. Returning Profits to Shareholders
3. Returning Profits to Shareholders © Azbil Corporation. All rights reserved. 17
Slide 18: Plan to Further Improve Shareholder Returns and to Implement a Stock Split
3. Returning Profits to Shareholders Plan to Further Improve Shareholder Returns and to Implement a Stock Split, in Accordance with Our Basic Policy In accordance with our basic policy—promoting shareholder returns, investing for growth, Basic policy and maintaining a sound financial base—, while we
Slide 19: Overview of the Stock Split
3. Returning Profits to Shareholders Overview of the Stock Split It is planned to implement a 4-for-1 common stock split. Stock split Investment unit cost to be in the 100-thousand-yen range* following the stock split * Estimated from closing price on May 10, 2024 (Friday). To increase share liquidi
Slide 20: Plan for FY2023 Year-end Dividend and FY2024 Annual Dividend
3. Returning Profits to Shareholders Plan for FY2023 Year-end Dividend and FY2024 Annual Dividend FY2023 It is planned to increase the year-end dividend to 39.50 yen per share, to make an annual dividend dividend of 76 yen per share. FY2024 It is planned to increase the dividend by 12 yen per share,
Slide 21: Trend of Shareholder Returns
3. Returning Profits to Shareholders Trend of Shareholder Returns It is planned to increase the year-end dividend for FY2023 by 3 yen, and furthermore increase the annual dividend for FY2024 by 12 yen to 88 yen per share, which is an increase for the tenth consecutive fiscal year. (Yen) Dividend p
Slide 22: 4. Progress in Implementing the Medium-term Plan
4. Progress in Implementing the Medium-term Plan © Azbil Corporation. All rights reserved. 22
Slide 23: Long-term Targets and Medium-term Plan
4. Progress in Implementing 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 automation Long-term targets technology. Focusing on the growth of t
Slide 24: Initiatives for Continuous Sales Expansion and Strengthened Business Profitability
4. Progress in Implementing the Medium-term Plan Initiatives for Continuous Sales Expansion and Strengthened Business Profitability While there has been some continuing impact from parts procurement difficulties and price hikes of parts, it was possible to improve revenue, profits and profitabilit
Slide 25: Growth in Overseas Markets
4. Progress in Implementing the Medium-term Plan Growth in Overseas Markets Overseas sales have increased steadily thanks to strengthening of the sales system, promotion of DX, etc. Progress is being made with reinforcing the business foundation. For example, by constructing a new factory building
Slide 26: Examples of Progress of Initiatives for Transformation
4. Progress in Implementing the Medium-term Plan Reference: Examples of Progress of Initiatives for Transformation Aimed at Strengthening Profitability and Expanding Overseas Business BA AA Focus on profitable existing building field; Sales and segment profit for AA business striving to enhance the
Slide 27: Progress and Forecast by Segment for the Medium-term Plan
4. Progress in Implementing the Medium-term Plan Progress and Forecast by Segment for the Medium-term Plan Overall, steady progress is being made with the medium-term plan. The BA and AA businesses have almost achieved their medium- term targets formulated in 2021 one year ahead of schedule. We are
Slide 28: Aiming at Transformation for Further Growth
4. Progress in Implementing the Medium-term Plan Aiming at Transformation for Further Growth, Building on the Results of Transformation to date Track changes in customers’ business models and demand resulting from structural changes in the business environment, and, to expand and achieve growth in
Slide 29: Initiatives to Strengthen Product Competitiveness
4. Progress in Implementing the Medium-term Plan Reference: Initiatives to Strengthen Product Competitiveness Business development initiatives involving alliance and Introduction of new products and services investments with other companies Expand cloud service applications for buildings; contribu
Slide 30: Investing in Human Capital—Benefits and Financial Measures
4. Progress in Implementing the Medium-term Plan Reference: Investing in Human Capital—Benefits and Financial Measures to Strengthen Employee Engagement Partial Revision to the Employee Stock Ownership Plan (J-ESOP) (page 18), further increasing employee incentives and enhancing engagement Employee
Slide 31: The azbil Group's Sustainability Management
4. Progress in Implementing the Medium-term Plan The azbil Group’s Sustainability Management Materiality is identified from the perspective of sustainability and contributing “in series” to a sustainable society. As regards the seven key categories related to business and corporate activities, speci
Slide 32: Setting SDG Quantitative Indicators for Businesses
4. Progress in Implementing the Medium-term Plan Reference: Setting SDG Quantitative Indicators for Businesses that Contribute “In Series” to a Sustainable Society Environment and energy is one of the azbil Group’s four Essential Goals for achieving the SDGs. We have set a new quantitative indicator
Slide 33: Appendix
Appendix • Performance Trend by Segment ・・・34 • Capital Investment, Depreciation and R&D Expenses ・・・36 • Initiatives in Three Growth Fields and Application to Each Business Segment ・・・37 • Contribution to the Environment ・・・38 • Corporate Governance ・・・40 • External Evaluation and Initiatives ・・・43
Slide 34: 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) 300.0 300.0 250.0 250.0 200.0 200.0 150.0 150.0 100.0 100.0 50.0 50.0 0.0 0.0 FY2020 FY2021 FY2022 FY2023 FY2020 FY2021 FY2022 FY2023 ■
Slide 35: 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) (%) 40.0 20.0 300.0 35.0 250.0 30.0 15.0 200.0 25.0 150.0 20.0 10.0 15.0 100.0 10.0 5.0 50.0 5.0 0.0 0.0 0.0 FY2020 FY2021 FY2022 FY2023 FY2020 F
Slide 36: Capital Investment, Depreciation and R&D Expenses
Appendix Capital Investment, Depreciation and R&D Expenses ■ Capital investment, depreciation ■ R&D expenses Full-year results Full-year plan (%) (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 5.0 5.0 2.0 2.5 2.5 1.0 0.0 0.0 0.0 FY2021 FY2022 FY2023 FY2024
Slide 37: 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 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: Contribution to the Environment
Appendix 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 substantially zero emissions by 2050, we have developed our long-term vision for reducing greenhous
Slide 40: Corporate Governance (1)
Appendix Corporate Governance (1) 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 supervisory and executive fun
Slide 41: Corporate Governance (2)
Appendix Corporate Governance (2) Number of directors Skill matrix • Ratio of independent outside directors increased to 66.7%（2022） • Disclosed skill matrix (2021) ‒ The Board of Directors at the meeting held on May 14, 2021 defined the skills (People) Total number of directors Independent outside
Slide 42: Corporate Governance (3)
Appendix Corporate Governance (3) Sustainability • In the medium-term plan, we recognize that addressing sustainability is not simply a response to risk, but also an important business opportunity for enhancing enterprise value. We will thus work to contribute “in series” to the achievement of a sus
Slide 43: External Evaluation and Initiatives
Appendix External Evaluation and Initiatives (as of April 2024) ESG-related topics—Inclusion in ESG indexes, external evaluation and initiatives Six indexes adopted by the Government Pension Investment Fund (GPIF) of Japan FTSE Blossom Japan Index FTSE Blossom Japan Sector Relative Index MSC
Slide 44: 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 45: Notes (2)
Notes (2) 4. Essential Goals of the azbil Group for SDGs *1 Science-based targets (SBT): 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 g
Slide 46: Notes (3)
Notes (3) 4. Essential Goals of the azbil Group for SDGs *8 Provide environments that support stress-free and diverse work styles to 6 million people: As of April 2022, environments that support stress-free and diverse work styles have been provided to 0.6 million people, aiming to increase tenfold
Slide 47: 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