Azbil : Presentation Materials for the Fiscal Year Ended March 31, 2023

Presentation Materials

for the Fiscal Year Ended March 31, 2023

(Based on Japanese GAAP)

May 12, 2023

Azbil Corporation

RIC: 6845.T, Sedol: 6985543

© Azbil Corporation. All rights reserved.

Highlights

1. Consolidated Financial Results for FY2022

We achieved record financial results for the second consecutive fiscal year, with increased revenue and profits.

• We recorded the highest figures ever for orders received and order backlog (156 billion yen, up 16.2% compared with FY2021).
• Faced with parts shortages and procurement difficulties, we secured sales through initiatives to strengthen procurement and production capabilities.
• Despite price hikes of parts and other factors, thanks to higher revenue and enhanced profitability, operating income topped 30 billion yen, a record high.

2. Consolidated Financial Plan for FY2023

We plan to increase both net sales and operating income for the third consecutive fiscal year.

1. • Drawing on the improvements we made to procurement and production processes during FY2022, 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.
   • We will continue and expand investment for growth-in R&D, equipment and facilities, DX, and human capital.
2. Returning Profits to Shareholders
3. • The year-end dividend for FY2022 is to be increased from the previously announced figure by 1 yen, making an annual dividend of 66 yen per share. It is planned to increase the dividend next year, making FY2023 annual dividend 73 yen per share; this would 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 will repurchase the Company's own stock (up to a maximum of 10 billion yen or 4 million shares) and cancel all of the treasury shares thus acquired.
4. Progress in Implementing the Medium-term Plan
5. • We are accelerating transformation for growth. To strengthen product competitiveness, we are actively investing in R&D, equipment and facilities, and human capital.

© Azbil Corporation. All rights reserved.

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Contents

1.	Consolidated Financial Results for FY2022	4
2.	Consolidated Financial Plan for FY2023	13
3.	Returning Profits to Shareholders	18
4.	Progress in Implementing the Medium-term Plan	23
	Appendix	38
	Notes	56

© Azbil Corporation. All rights reserved.

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1. Consolidated Financial Results for FY2022

© Azbil Corporation. All rights reserved.

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1. Consolidated Financial Results for FY2022

Consolidated Financial Results

• Orders received increased for the second consecutive fiscal year. The order backlog also reached a record high, standing at 156 billion yen.
• Both net sales and profits exceeded the plan (announced on November 8, 2022), representing a new record for business results.
• To cope with parts shortages and procurement difficulties, procurement and production capabilities were strengthened.

(Billions of yen)

	FY2021	FY2022	Difference
	(A)	(B)	(B) - (A)	% Change
Orders received	286.9	296.9	9.9	3.5
Net sales	256.5	278.4	21.8	8.5
Japan	204.3	215.7	11.4	5.6
Overseas	52.1	62.6	10.4	20.0
Gross profit	105.7	111.9	6.2	5.9
Margin	41.2	40.2	(1.0)pp
SG&A	77.4	80.6	3.2	4.1
Operating income (loss)	28.2	31.2	3.0	10.7
Margin	11.0	11.2	0.2pp
Ordinary income (loss)	29.5	32.1	2.6	8.9
Income (loss) before income taxes	30.0	32.1	2.0	6.9
Net income (loss) attributable to	20.7	22.6	1.8	8.8
owners of parent
Margin	8.1	8.1	0.0pp

(Billions of yen)

Revised plan	Difference
(Nov. 8, 2022)
(C)	(B) - (C)	% Change
277.5	0.9	0.3
29.8	1.4	4.9
10.7	0.5pp
31.0	1.1	3.7
21.8	0.8	3.7
7.9	0.3pp

• The impact of foreign exchange rate fluctuations (compared with the previous fiscal year)
  +6.41 billion yen for net sales, +0.80 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.

• In the LA business, provision for product warranties (2.49 billion yen)-to meet anticipated expenses resulting from defects in some of the LP gas meters- was recorded as an extraordinary loss.

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