Medium-term Plan

New Long-term Targets (for Fiscal Year 2030) and New Medium-term Plan (for Fiscal Years 2021 to 2024)

The azbil Group announced in May 2021 that it has established new long-term targets (for fiscal year 2030) as well as a new medium-term plan (for fiscal years 2021 to 2024) with the aim of achieving growth and contributing “in series” to the achievement of a sustainable society by providing automation-related products and services.

Based on the philosophy of “human-centered automation,” the azbil Group aims to ensure its own sound growth over the medium to long term and sustainably increase its corporate value by contributing “in series” to the achievement of a sustainable society through its business. Accordingly, the azbil Group has established new long-term targets to be met by fiscal year 2030 in which it aims to become a corporate organization with net sales in the 400 billion yen range, operating income in the 60 billion yen range, operating income margin of approx. 15%, and return on equity (ROE) of approx. 13.5%. As the first step in achieving these targets, the Group established its new medium-term plan (for fiscal years 2021 to 2024). Focusing on expanding the azbil Group’s previously defined three growth fields—new automation, environment and energy, and life-cycle solutions—which share a common foundation of automation technology, the azbil Group will develop and achieve global growth in its businesses: Building Automation (BA), Advanced Automation (AA), and Life Automation (LA).

Progress in the three growth fields

The azbil Group is transforming its business model centered on “the three growth fields that share a common foundation of automation technology.”

The new automation fields will quickly respond to global social issues and changes in customers’ needs born from changes in the societal structure and business environment, including responding to climate change, co-existing with viruses, work-style reform, response to aging infrastructure, and more sophisticated manufacturing. Through automation, we will provide value including high quality, safety, remote environments, and decarbonization, helping to bring about improvements to the quality of space and productivity in customers’ assets.

When providing this added value, in general, more energy and resources are consumed. However, azbil is developing business using accumulated data and products, services, and know-how that are effective in saving energy and resources. The environmental and energy field will respond to both the demands of society and customers’ needs.

Furthermore, the life-cycle solution field provides maintenance services over the long term that balance “improvements to the quality of space and productivity” with “resource and energy minimization” to match the life cycle of customers’ assets.

The ability to engage in these three areas of value as business fields is a business value unique to the azbil Group, which has pursued the optimization of human-centered spaces through an integrated structure ranging from concept to design, construction, installation, engineering, and maintenance. Going forward, by strengthening our engineering and service business platform using DX, we will provide these three growth fields to society and our customers as a common automation value that goes beyond national borders and business sectors.

Initiatives to Realize the New Medium-term Plan (Fiscal Years 2021to 2024)

Investments and measures for continuous creation of solutions
In order to develop business centered on the three growth fields, we will carry out proactive research and development and capital investment to accelerate the development and market introduction of new products and services. Additionally, we will strengthen the following three areas: our production and procurement system to deliver new product and services globally; DX implementation in sales, service and engineering, which are required to create high added value in our services and increase business efficiency; and network infrastructure enhancement. In making investments for business growth, to encourage management awareness of the cost of capital, we will track return on invested capital (ROIC) to ensure effective use of management resources.

1) Technological research
We will strengthen our marketing and development capabilities to reinforce new product and service development to create new solutions continuously. In terms of development, we will strengthen our development capabilities in system solutions, devices, and field instruments to respond to increasingly polarized customer needs. To that end, we will upgrade and strengthen the Fujisawa Technology Center, our research and development hub, to reinforce our development capabilities for cutting-edge system solutions and high-performance, high-precision devices (construction to be completed in 2022).

2) Strengthening sales, engineering, and service networks and promoting DX
We will undertake initiatives to further strengthen domestic and overseas sales and service networks, including introducing and globally developing sales force automation (SFA, a sales support system) and increasing overseas personnel and bases. Additionally, we will improve the provision of high value-added services by using cloud services such as remote maintenance, promote business partnerships, and carry out overseas regional business development with the Strategic Planning & Development Office for Southeast Asia taking a central role.

3) Strengthening global production and procurement system
As for fulfilling our social responsibility in our supply chain and building an optimal production system to support global business development, our Shonan Factory and Fujisawa Technology Center have collaborated in building a next-generation production system. We are also aiming to expand our production capacity overseas in response to growing global demand and to upgrade and further automate our production processes by constructing a new factory building at Azbil Control Instruments (Dalian) (construction to be completed in 2022).

Realizing sustainability through CSR management unique to azbil
We will pursue management that contributes ‘“in series’” to the achievement of a sustainable society through our core businesses.
Additionally, we will continue to strengthen CSR management with priorities for action such as promoting Group management and strengthening governance, strengthening risk management and compliance system, promoting management with emphasis on people, and contributing to the global environment and society.

1) CSR management and increased openness
We have established a specialized organization and an executive officer in charge of our sustainability initiatives, hold azbil Group CSR Promotion Committee meetings, and provide progress reports at Management Meetings and Board of Directors meetings. We proactively disclose risks and opportunities related to our SDG targets (see below) and climate change according to the recommendations by the Task Force on Climate-related Financial Disclosures (TCFD).

2) Disclosure of skills matrix for directors
To support growth toward the goal of contributing “in series” to achieving a sustainable society in our medium-term plan, we set the skills expected in directors and disclose a skills matrix.

3) Pursuing “health and well-being management”
In terms of human resources, we are promoting “health and well-being management,” diversity and inclusion, and optimal personnel allocations.

4) Establishing SDG goals
Regarding the SDGs, we have established our own four essential goals and concrete targets. We will implement continuous revisions to ensure steady execution and boost our activity level.

5) Signing the United Nations Global Compact
In April 2021, we became a signatory to the United Nations Global Compact, underlining our commitment to strengthen our existing initiative for human rights protection on a global level.

Related Information: Presentation Materials for the Fiscal Year Ended March 31, 2021; Interview with the CEO; azbil Report: Establishing New Long-term Targets and the New Medium-term Plan