Azbil (6845) Status update summary

Strategy and financial targets

• FY2024 net sales, operating income, operating margin and ROE targets were achieved; ROE was 17.9% reported and 14.2% excluding the Azbil Telstar transfer gain.

• FY2027 targets: net sales ¥340bn, operating income ¥51bn, operating margin 15%, overseas sales ¥62bn and ROE 14%.

• FY2030 targets were raised to net sales ¥420bn and operating income ¥65bn; operating margin target is 15.5% and ROE target is 15%.

• FY2025–FY2027 strategy, “Evolution and Co-creation,” pairs growth-market expansion with stronger core businesses, human capital, product competitiveness and DX.

• FY2027 overseas sales target of ¥62bn compares with an adjusted FY2024 baseline of ¥48.5bn excluding Azbil Telstar, implying ~8.5% average annual growth.

Investment and capital allocation

• Three-year incremental investment: ¥32bn in personnel expenses, ¥9bn in R&D/product competitiveness and ¥5bn in DX/IT; ~¥50bn of business expansion investment planned, including proactive use of debt.

• Capital allocation balances investment, shareholder returns and a sound balance sheet; dividend on equity target above 6%, with FY2025 annual dividend planned at ¥26 per share.

• FY2025 plans include a ¥15bn share repurchase and ¥20bn treasury-share cancellation; separately, of ¥30bn in repurchases, ¥25bn was canceled and ¥5bn funded stock-based compensation.

• A ¥6.5bn employee stock ownership incentive plan was launched; portfolio actions included divesting Azbil VorTek and transferring Azbil Telstar based on ROIC, profitability and strategic alignment.

Building automation

• FY2027 targets: sales ¥174.0bn, up 17%, and segment profit ¥26.9bn, up 11% versus the current level.

• Domestic priorities include GX solutions, high-value systems and services, cloud applications, renovations and energy-saving projects; ~10,000 buildings are expected to undergo gradual renewal.

• ~4,000 buildings are connected online and remote maintenance has reached a 50% transition rate; building data supports cloud-based applications.

• Overseas growth will build project stock through proactive sales; data-center business is growing ~35% annually, while expansion may temporarily weigh on margins.