Azbil : Presentation Materials for the First Quarter of the Fiscal Year Ending March 31, 2024

Presentation Materials

for the First Quarter of Fiscal Year 2023

(Ending March 31, 2024)

(Based on Japanese GAAP)

August 8, 2023

Azbil Corporation

RIC: 6845.T, Sedol: 6985543

© Azbil Corporation. All rights reserved.

Highlights

1. Consolidated Financial Results for the First Quarter of FY2023

Owing to a slump in the semiconductor market conditions and to the fact that this was a period when few multi-year service contracts were up for renewal, orders received declined. However, thanks to strengthened procurement and production capabilities, order backlog was steadily converted into sales. Profits rose significantly due to this increased revenue and the effect of measures to strengthen profitability.

• Orders received were 84.3 billion yen (down 8.4 billion yen or 9.1% on the same period of FY2022). This was partly due to the sluggish semiconductor manufacturing equipment market, but also to the fact that this was a period when few multi-year service contracts were up for renewal. However, the order backlog attained a high level at 180.1 billion yen (up 6.8 billion yen or 4.0% on the same period of FY2022).
• Revenue increased thanks to the growth in orders received in FY2022 as well as expanded production, reflecting strengthened procurement and production systems. Net sales were 61.2 billion yen (up 5.1 billion yen or 9.2% on the same period of FY2022).
• Despite an increase in expenses for R&D, DX, and other expenses, operating income was 4.6 billion yen (up 2.4 billion yen or 114.6% on the same period of FY2022). This resulted from higher revenue and measures to enhance profitability, including cost pass-through.

2. Consolidated Financial Plan for FY2023

No revision to the initial financial plan. Despite the uncertainty in some business environments, we plan to increase both net sales and operating income for the third consecutive fiscal year by making further progress with sustainable growth for our business portfolio-in which the three segments (BA, AA, LA) each operate in different market environments-and with measures to enhance profitability.

• The BA business continues to benefit from robust market conditions in Japan and overseas. Also, demand remains firm for plant maintenance and repair in the AA business and for meter replacement in the LA business, although the cyclical demand for LP gas meters is at a low ebb.
• Harnessing the progress we made during FY2022 in strengthening procurement and production capabilities, we aim to continue increasing revenue by steadily converting the large order backlog into sales.
• We aim to set a new record for operating income by implementing measures to enhance profitability, such as increasing margins at the point of order receipt and effecting cost pass-through.

3. Returning Profits to Shareholders

• The Company plans to make an FY2023 annual dividend of 73 yen per share; this will represent the ninth consecutive year of dividend increases. Based on the continuation of stable dividend payments, we aim to further improve the dividend on equity (DOE) ratio (4.4% for FY2022).
• We are repurchasing the Company's own stock (up to a maximum of 10 billion yen or 4 million shares) and plan to cancel all of the treasury shares thus acquired.

© Azbil Corporation. All rights reserved.

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Contents

1.	Consolidated Financial Results for the First Quarter of FY2023	4
2.	Consolidated Financial Plan for FY2023	12
	→No revision from the most recent announcement
3.	Returning Profits to Shareholders	16
	→No revision from the most recent announcement

Appendix I	Financial Data	21
Appendix II	Medium-term Plan and Sustainability Management	27
Notes		33

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1. Consolidated Financial Results for the First Quarter of FY2023

© Azbil Corporation. All rights reserved.

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1. Consolidated Financial Results for the First Quarter of FY2023

Consolidated Financial Results

• Orders received fell short of the high level achieved in the same period of FY2022, when multi-year service contracts were renewed. Sluggish conditions in some markets also contributed to this decrease.
• Net sales rose, reflecting the increase in orders received in FY2022 as well as the steady progress made in procurement and production.
• Operating income also rose significantly on increased revenue and measures to enhance profitability, including cost pass- through.

(Billions of yen)

	FY2022	FY2023	Difference
	Q1	Q1
	(A)	(B)	(B) - (A)	% Change
Orders received	92.8	84.3	(8.4)		(9.1)
Net sales	56.0	61.2	5.1		9.2
Japan	43.3	46.6	3.3		7.7
Overseas	12.7	14.5	1.8		14.3
Gross profit	20.8	24.7	3.8		18.4
Margin	37.2	40.4	3.1pp
SG&A	18.7	20.0	1.3		7.2
Operating income (loss)	2.1	4.6	2.4		114.6
Margin	3.9	7.6	3.7pp
Ordinary income (loss)	3.3	5.6	2.3		71.1
Income (loss) before income taxes	3.3	5.6	2.3		70.6
Net income (loss) attributable to	2.0	3.7	1.6		79.1
owners of parent
Margin	3.7	6.1	2.4pp

• The impact of foreign exchange rate fluctuations (compared with the same period of FY2022)
  +1.2 billion yen for net sales, +0.1 billion yen for operating income
  The impact of foreign exchange rate fluctuations is derived from the difference in rates, between the previous and current periods, used to convert overseas subsidiaries' P/L into yen from the local currency.

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