Smart Buildings

Azbil Building Automation Business & FY2023 Financials Examined

In this Research Note, we examine Azbil, a Japanese public company with a leading position in the domestic building automation market. The financial highlights and growth strategy analysis of the Building Automation business is based on their FY2023 annual results, year ending 31st March 2024, Annual Report 2023, and investor presentations. Azbil Building Automation Financial Highlights The Building Automation (BA) business provides air conditioning control technologies incorporated in numerous large-scale facilities, including office buildings, hotels, and shopping centers. They are used to conduct detailed measurements of temperature, humidity, and other factors and control facilities and equipment in a manner that delivers comfort and energy savings. The BA business, the largest of three business units, accounts for 46.3% of consolidated net sales for the Azbil Group. Azbil Presentation, 13 May 2024 BA sales, year ending 31 March 2024 increased 4.7% year-on-year to 134.65 billion yen (around USD $861 million). Segment profit increased to 19.3 billion yen, […]

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In this Research Note, we examine Azbil, a Japanese public company with a leading position in the domestic building automation market.

The financial highlights and growth strategy analysis of the Building Automation business is based on their FY2023 annual results, year ending 31st March 2024, Annual Report 2023, and investor presentations.

Azbil Building Automation Financial Highlights

The Building Automation (BA) business provides air conditioning control technologies incorporated in numerous large-scale facilities, including office buildings, hotels, and shopping centers.

They are used to conduct detailed measurements of temperature, humidity, and other factors and control facilities and equipment in a manner that delivers comfort and energy savings.

The BA business, the largest of three business units, accounts for 46.3% of consolidated net sales for the Azbil Group.

Azbil Building Automation 2023
Azbil Presentation, 13 May 2024

BA sales, year ending 31 March 2024 increased 4.7% year-on-year to 134.65 billion yen (around USD $861 million). Segment profit increased to 19.3 billion yen, mainly due to the profitable existing building and service fields.

Vision & Growth Strategy for Building Automation Business

The overall vision in the medium-term is to become the No. 1 BA supplier in Asia. Core strategies include:

  • Provide energy savings and wellness based on the integration of BA systems, IoT devices, and field instruments, as well as accumulated data and know-how.
  • Strengthen solutions capabilities and expand business fields, including collaboration with other companies.
  • Offer cloud-based energy efficiencies and energy services with environmental value.
  • Provide proven energy-saving apps and engineering services that meet safety and comfort needs overseas.

Expansion of Cloud Services for Buildings

Azbil Cloud Services
Azbil 2023 Annual Report, p.40

As regards product offerings, Azbil will significantly broaden their lineup in the field of cloud-based applications, beyond the conventional provision of goods and engineering services.

It has not been easy to make outside use of information managed by building automation systems (BAS) due to cost and security concerns. However, with the help of rapidly evolving cloud technologies, they can now address such issues and offer even higher value-added services.

They aim to provide building users and operators access to some BAS functions through their smart devices (external deployment of existing BAS functions); access to advanced computing functions for operational assistance that contributes to laborsaving, energy-saving, and CO2 emissions reduction (increasing sophistication of BAS functions); and access to more information that can help improve the wellness of occupants.

Energy Services Business Alliance

In January 2023, Azbil formed an alliance with CEC, Clean Energy Connect, a Japanese corporate green power solutions business. Together with CEC, Azbil will help customers achieve decarbonization by providing one-stop renewable energy solutions in addition to energy conservation.

By combining Azbil's demand response technology and virtual power plant operational experience, they aim to realize effective use of renewable energy, which has large output fluctuations, and improve the utilization rate of renewable energy in their customers' buildings.

Azbil Alliance CEC
Azbil 2023 Annual Report, p.42

ESCO Services in Thailand

In October 2023, Azbil announced it was providing ESCO services for The Athenee Hotel in Bangkok. Azbil (Thailand) will introduce Building Energy Management System (BEMS) to improve the operation of equipment such as the air-conditioning and ventilation system, to increase efficiency, and to introduce various energy-conservation controls.

Fuyo Lease (Thailand) will own and manage the facilities using the BEMS. This project is expected to reduce the total energy consumption (electrical bill) of The Athenee Hotel by approximately 8% and energy consumption of the air-conditioning system by about 12%, contributing to the reduction of CO2 emissions.

The BA FY2024 Financial Plan forecasts increased revenue of 142.0 billion yen against the backdrop of a robust business environment and a large order backlog.

This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.

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