Slide 1: Presentation Materials for the Fiscal Year Ended March 31, 2022
Presentation Materials for the Fiscal Year Ended March 31, 2022 (Based on Japanese GAAP) May 13, 2022 Azbil Corporation RIC: 6845.T, Sedol: 6985543 © Azbil Corporation. All rights reserved.
Slide 2: Contents
Contents 1. Financial Results for FY2021 3 2. Financial Plan for FY2022 13 3. Returning Profits to Shareholders 18 4. Progress in Implementing the Medium-term Plan 23 5. Initiatives to Enhance Corporate Governance 33 Appendix 35 Notes 45 © Azbil Corporation. All rights reserved. 2
Slide 3: 1. Financial Results for FY2021
1. Financial Results for FY2021 © Azbil Corporation. All rights reserved. 3
Slide 4: Consolidated Financial Results
1. Financial Results for FY2021 Consolidated Financial Results ⚫ In FY2021, orders received, net sales, and profits all increased compared with FY2020. This was due to the recovery from the market downturn caused by the COVID-19 pandemic in FY2020, and also partly to the impact of customers’ advance
Slide 5: Segment Information: BA Business
1. Financial Results for FY2021 Segment Information: BA Business In the domestic market, demand has continued to grow for urban redevelopment projects and for heating, ventilation, and air conditioning (HVAC) control equipment / systems for factories, and there is growing interest in solutions relat
Slide 6: Segment Information: AA Business
1. Financial Results for FY2021 Segment Information: AA Business As regards market trends in Japan and abroad, expanding investment in 5G has led to sustained high demand in the market for semiconductor manufacturing equipment. The COVID-19 pandemic has yet to abate; however, overall capital investm
Slide 7: Segment Information: LA Business
1. Financial Results for FY2021 Segment Information: LA Business The Lifeline field (gas/water meters, etc.) depends on cyclical demand for meter replacement as required by law and thus demands can be expected to remain stable. However, changes in some markets have been observed, such as that for LP
Slide 8: Reference: Performance Trend by Segment (1)
1. Financial Results for FY2021 Reference: Performance Trend by Segment (1) ■ Orders received by segment ■ Order backlog by segment (Billions of yen) (Billions of yen) 300.0 150.0 250.0 125.0 200.0 100.0 150.0 75.0 100.0 50.0 50.0 25.0 0.0 0.0 FY2018 FY2019 FY2020 FY2021 FY2018 FY2019 FY2020 FY2021
Slide 9: Reference: Performance Trend by Segment (2)
1. Financial Results for FY2021 Reference: Performance Trend by Segment (2) ■ 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 FY2018 FY2019 FY2020 FY202
Slide 10: Overseas Sales by Region
1. Financial Results for FY2021 Overseas Sales by Region (Billions of yen) (%) Overseas sales rose by 16.3% from FY2020. 60.0 30.0 In Asia, sales growth was achieved despite the impact of the COVID-19 pandemic and the fact that sales for several large-scale projects had been recorded in FY2020. This
Slide 11: Consolidated Financial Position
1. Financial Results for FY2021 Consolidated Financial Position ⚫ Assets Total assets decreased by 4.5 billion yen from the end of FY2020. This was owing mainly to a decrease in cash and deposits, in spite of an increase in property, plant and equipment following capital investments to enhance Fujis
Slide 12: Consolidated Cash Flows
1. Financial Results for FY2021 Consolidated Cash Flows ⚫ Net cash provided by operating activities decreased compared to FY2020 owing mainly to an increased payment of trade payables by a change of the Company’s standard payment terms as well as an increase in trade receivables and inventories with
Slide 13: 2. Financial Plan for FY2022
2. Financial Plan for FY2022 © Azbil Corporation. All rights reserved. 13
Slide 14: Consolidated Financial Plan
2. Financial Plan for FY2022 Consolidated Financial Plan We will strive to expand business in the three growth fields, which address new issues facing society and customer needs, while ensuring that we tap into robust market demand. We will also strengthen business profitability and steadily impleme
Slide 15: Financial Plan by Segment (1)
2. Financial Plan for FY2022 Financial Plan by Segment (1) (Billions of yen) FY2021 FY2022 Full year H1 H2 Full year Difference (results) (plan) (plan) (plan) (A) (B) (B) - (A) % Change ■ B A Sales 119.7 53.0 76.0 129.0 9.2 7.7 Segment profit 13.8 2.5 12.0 14.5 0.6 4.6 Margin 11.6 4.7 15.8 11.2 (0.3
Slide 16: Financial Plan by Segment (2)
2. Financial Plan for FY2022 Financial Plan by Segment (2) We plan to increase both sales and profit thanks to the order backlog and increasing demand BA related to both new buildings and existing buildings. ⚫ Demand for HVAC control equipment/systems for large-scale buildings is robust, and conside
Slide 17: Reference: Sales by Segment and Segment Profit (Operating Income)
2. 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 50.0 5.0 2.5 0.0 0.0 0.0 FY2019
Slide 18: 3. Returning Profits to Shareholders
3. Returning Profits to Shareholders © 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 In line with our basic policy—promoting shareholder returns, investment Basic policy in growth and healthy financial foundation—we will repurchase the Company’s own stock and will inc
Slide 20: Plan for FY2021 Year-end Dividend and FY2022 Annual Dividend
3. Returning Profits to Shareholders Plan for FY2021 Year-end Dividend and FY2022 Annual Dividend FY2021 It is planned to pay a year-end dividend of 30 yen per share, to make an annual dividend of 60 yen per share, dividend as announced at the beginning of FY2021. FY2022 It is planned to increase an
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 It is planned to repurchase the Company’s own stock up to a maximum of 10.0 billion yen (or 4.0 million shares). stock Cancellation of treasury It is planned to cancel the Company’s tre
Slide 22: 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 4.2 (plan) 65.0 (plan) 4.5
Slide 23: 4. Progress in Implementing the Medium-term Plan
4. Progress in Implementing the Medium-term Plan © Azbil Corporation. All rights reserved. 23
Slide 24: 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 previously defined three growth fields—new automation, environment and energy, and life- Long-term cycle solution—which share a common foundation of automation technology. Focusing on the growth
Slide 25: Initiatives in Three Growth Fields and Measures to Achieve Expansion
4. Progress in Implementing the Medium-term Plan Initiatives in Three Growth Fields and Measures to Achieve Expansion ⚫ Sharing a common foundation of automation technology, the three growth fields will enable continually carrying out improvements to the quality of space and productivity in customer
Slide 26: Expansion in Business Fields including Collaboration with Other Companies
4. Progress in Implementing the Medium-term Plan Expansion in Business Fields including Collaboration with Other Companies ⚫ When it comes to key challenges facing society such as climate change, these typically involve various interrelated issues over a wide range of fields. Thus, in addition to ou
Slide 27: Expand Range of Solution-oriented Products and Services
4. Progress in Implementing the Medium-term Plan Expand Range of Solution-oriented Products and Services We are implementing vigorous R&D spending and capital investment to accelerate the development and introduction of new products and services. We upgraded and enhanced the Fujisawa Technology Cent
Slide 28: Business Environment and Progress of Measures within Each Business (BA/AA/LA)
4. Progress in Implementing 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 containe
Slide 29: Achieving Growth in Overseas Markets Using Opportunities Offered by a Changing Business Environment
4. Progress in Implementing the Medium-term Plan Achieving Growth in Overseas Markets Using Opportunities Offered by a Changing Business Environment ⚫ We will implement measures to develop our business foundation overseas and expand business by developing production, procurement, sales, and service
Slide 30: Continuously Enhancing Profit Margins to Achieve Sustainable Growth
4. Progress in Implementing the Medium-term Plan Continuously Enhancing Profit Margins to Achieve Sustainable Growth ⚫ While investing in R&D and increasing capital investment to expand the three growth fields, we aim to achieve an operating income ratio in FY2030 of approx. 15% by expanding and dev
Slide 31: Sustained Growth and Contribution "In Series" to the Achievement of a Sustainable Society
4. Progress in Implementing the Medium-term Plan Sustained Growth and Contribution “In Series” to the Achievement of a Sustainable Society The azbil Group is committed to continuously enhancing corporate value based on mutual trust with stakeholders, to realize “safety, comfort, and fulfillment” in
Slide 32: Essential Goals of azbil Group for SDGs
4. Progress in Implementing the Medium-term Plan Essential Goals of azbil Group for SDGs Regarding SDGs, we have set our four 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 lev
Slide 33: 5. Initiatives to Enhance Corporate Governance
5. Initiatives to Enhance Corporate Governance © Azbil Corporation. All rights reserved. 33
Slide 34: Transition to a New Board Structure Based on Three Committees / Introduction of Stock Compensation Plan
5. Initiatives to Enhance Corporate Governance Transition to a New Board Structure Based on Three Committees / Introduction of Stock Compensation Plan Plan ⚫ Transition to a new board structure based on three committees ➢ Aiming to promote further reforms in corporate governance, the Company is tran
Slide 35: Appendix
Appendix © Azbil Corporation. All rights reserved. 35
Slide 36: Capital Expenditure, Depreciation and R&D Expenses
Capital Expenditure, Depreciation and R&D Expenses Full-year results 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 4.0 7.5 7.5 3.0 4.9 (p
Slide 37: Cell-type HVAC system
Cell-type HVAC system New HVAC system is suited to the diversifying work styles and office use of this “new normal” era New automation + Environment and energy With the ongoing diversification of work styles, the office environment is changing. This new HVAC system, which with is considerate of huma
Slide 38: Cloud-based valve analysis and diagnosis
Cloud-based valve analysis and diagnosis Harnessing DX to optimize maintenance and ensure safe and stable operation New automation + Life-cycle solution Monitoring valve status via the cloud enables the early detection and prediction of anomalies. Previously this was only possible by open inspection
Slide 39: DX-EGA: Next-generation energy management business
DX-EGA *1 : Next-generation energy management business Collaborative business concept that utilizes existing data collection methods and combines them with diverse operator data and services New automation + Life-cycle solution Against the backdrop of today’s environmental problems and the rapid gro
Slide 40: Contribution "In Series" to the Achievement of a Sustainable Society
Contribution “In Series” to the Achievement of a Sustainable Society Reduce about 170 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: 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 43: 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 44: External Evaluation and Initiatives (as of April 2022)
External Evaluation and Initiatives (as of April 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 Japan
Slide 45: 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 46: Notes (2) (from page 32)
Notes (2) (from page 32) 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 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