ENEOS : Presentation（1,321KB）

Security Code

5020

May 14, 2024

ENEOS Holdings, Inc.

FY2023 Financial Results and FY2024 Forecast

Agenda

Highlights of Financial Results and Forecast	p.3
Progress and Outlook of Third Medium-Term Management Plan	p.5
Shareholder Returns	p.14
Progress of Initiatives Aimed at Enhancing Corporate Value	p.16
Business Environment	p.18
Financial Results for FY2023	p.21
Forecast for FY2024	p.28
Reference	p.36

2

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3

Highlights of Financial Results and Forecast

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Highlights of Financial Results for FY2023 and Forecast for FY2024

4

FY2023

(Actual)

FY2022 ActualFY2023 ActualChanges

Operating Income	¥ 246.5	bn	¥ 393.2	bn	＋¥ 146.7 bn
(excl. inventory valuation)
Net Income	¥ 96.6	bn	¥ 237.9	bn	＋¥ 141.3 bn
Attributable to owners of the parent

(excl. inventory valuation)

• Operating income excl. inventory valuation significantly increased due mainly to a reversal of negative time-lag of petroleum products1 and export margins in last year and improvements in actual margins in petroleum products1 and petrochemicals.

FY2024

(Forecast)

FY2023 ActualFY2024 ForecastChanges

Operating Income	¥ 393.2	bn	¥ 400.0	bn	＋¥ 6.8	bn
(excl. inventory valuation)
Net Income	¥ 237.9		¥ 210.0		− ¥ 27.9
Attributable to owners of the parent	bn	bn	bn
(excl. inventory valuation)

• While factoring in cancellation of positive time-lag of petroleum products1 and exports, operating income excl. inventory valuation will mostly remain unchanged due mainly to improvement in refinery troubles and review of procurement portfolio in the Electricity segment.

1: Petroleum products: gasoline, kerosene, diesel fuel and fuel oil A

Copyright © ENEOS Holdings, Inc. All Rights Reserved.

5

Progress and Outlook of Third Medium-Term Management Plan

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Establishment of a Solid Earnings Base

６

• UCL (Unplanned Capacity Loss)

Continuously executing trouble reduction measures and increase in maintenance costs

UCL caused by facility maintenance, inspection and construction quality

UCL caused by operation

Yearly average of UCL (FY24 is a target)

UCL (%)

10%

7%

5％

4%

0%

1Q	2Q	3Q	4Q	FY24
		FY23	UCL is in declining trend

UCL caused by facility maintenance, inspection and construction quality

• Current UCL is declining due to the execution of continuous trouble reduction measures
  (enhancing facility maintenance strategies, sharing knowledge with construction contractors, acceleration of inspection, strengthening management structure, etc.) and increase in maintenance costs.
• Executing additional measures such as support by head office specialists in order to deal with troubles, which have increased in difficulty due to aging of facilities.

UCL caused by operation

• Decrease in current operational UCL due to ① enhancement of ability to detect signs of troubles and ②collaboration by sharing knowledge of operation, maintenance, engineering.
• Strengthening management of non-regular work such as start-ups of facilities (identifying high risks for start-ups and informing all refineries, placing well-trained engineers for support).

Aiming to achieve UCL 4% in FY2024

by executing effective measures

• BPR (Business Process Re-engineering)

¥54.0 bn in improvements in cumulative total since the start of BPR. In addition to cumulative improvements of ¥100.0 bn during the 3rd Mid-Term Management Plan period, pursuing further accumulation.

Factors	Main Measures Taken So Far	Improvements (¥bn)
~FY2023 Actual	~FY2024 Target
		Improvement from FY2022	Improvement from FY2023
Profit improvement/	Strengthening procurement capability, optimization of transport	47.0	56.0
and sales structures, reviewing business portfolio and sales prices,
cost cutting (PL)	27.0	9.0
optimization of IT system, etc.
Asset efficiency improvement (BS)	Selling out unnecessary and low-efficiency assets, etc.	7.0	5.0

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Acceleration of Initiatives for the Realization of Energy Transition

７

Policies on initiatives for the realization of carbon neutrality

Reduction of our

greenhouse gas emissions （Scope 1+2）

Progress of Third Medium-Term Management Plan

Targets

FY2023

FY2024 - FY2025

• on the timeline are measures implemented in FY2023. Please click or tap to jump to the corresponding news releases.
• Forest Absorption: Creating credits from forest absorption to achieve 500kt per year, the 3rd Mid-TermMgmt Plan target

CO2

✓ Curbing greenhouse gas

emissions

✓ Artificial fixation of CO2

• 3rd Mid-Term Mgmt Plan target: 500kt
  CO2 absorption per year with natural absorption such as forest absorption

Jul.: Joint investment in US large forestry fund

Nov.: Concluded agreement for collaboration with Morimachi Kayabegun, Hokkaido and Nippon Life on utilization of forests to realize decarbonized society

Forest Absorption1			500kt/year
	220kt/year
		FY2023 (As of Mar. 31)	FY2025 (As of Mar. 31)

✓ Increase of natural

absorption of CO2

Contribution to the reduction

of society's

greenhouse gas emissions

（Scope 3）

• Contribution to the reduction of emissions in the energy area
• Contribution to the reduction of emissions in the materials and services area

• CCS: Implementingsupport initiatives to build CCS/CCUS value chain with leading domestic and overseas companies with Japanese government

✓ Long-Term Vision target: Store ~3,000kt of CO2	Apr.			①	②	③	Mar. 31
per year by 2030, 4,000kt~10,000kt of CO2 per
year in 2040							④⑤⑥⑦
Selected as offshore wind power producer in
Happo Town and Noshiro City, Akita,		Expanding capacity to achieve 3rd Mid-Term Mgmt Plan target: 2GW
planning to launch construction in FY2025	May: Launched Agatsuma Kogen Onshore Wind Power Plant	Jun.: Launched Wakayama Solar Power Plant
➢ Renewable Energy	Aug.: Launched Sanda Mega Solar Power Plant		Sep.: Launched Naka Kyushu 2 Wind Power Plant
Sep.: Launched Edenvale Solar Power Plant in Australia	Feb.: Lanuched Fukuoka Mega Solar, etc.
✓ 3rd Mid-Term Mgmt Plan target: 2GW	Mar.: Launched Yachiyo 2 Mega Solar, etc.
generation capacity at the end of FY2025 2		Renewable Energy						2GW
		1.2 GW
✓ Long-Term Vision target: 6-8GWin FY2040
	Capacity2
		FY2023 (As of Mar. 31)		FY2025 (As of Mar. 31)

In addition to collaborations with Japanese government, prefectures and cities, expanding partnership structure in resource
➢ SAF: procurement to establish stable SAF supply chain			Mar. 31
✓ Long-Term Vision target: 50% of domestic	Apr.
3	3	3
market share in 2040		①	②③④⑤

• Hydrogen: Launched feasibility study for collaboration with a number of leading companies and for social practice to establish hydrogen supply chain

✓ Long-Term Vision target: Supply 250kt per	Apr.		Mar. 31
year in 2030 and 1,000~4,000kt per year		①	②③ ④⑤⑥
/ 50% of domestic market share in 2040

• Low-carbon high-octanegasoline: Launched studies and evaluations with domestic and overseas partners for the

✓ Long-Term Vision target: 10% blending of carbon-	proliferation of CN fuel
neutral fuels in high-octane gasoline in 2030 / 20%	Apr.	② ③	Mar. 31
blending of carbon-neutral fuels in gasoline / 50% of	①
domestic share in 2040

1 Project-based expected generation 2 Capacity based on ownership ratio (sum of operating plants/under construction) 3 Available in Japanese only

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Non-financial Target①

８

• Enhancement of Governance
• Reforming the Group management structure and improving transparency of corporate governance

Ceased management of HD and ENEOS in an integrated manner, introduced a Group Chief Officer system on Apr. 1, 2024.

HD will constantly monitor ROIC>WACC of the entire Group and each business, and advance portfolio management by strengthening collaborations among companies and optimizing resource allocation for further growth of each business.

ENEOS HD

＊After the 14th Ordinary General Meeting of Shareholders in June, 2024.

Board of Directors

Please refer to p.37 for details.

Appoint Outside Director

Skills for improving corporate value

Substantial increase of ratio of

Outside Directors

as Chair of the Board

ESG

Corporate Management

Digital

Inside

Outside

Investment / M＆A / International Business

Outside

Fostering and developing human resources

Finance / Accountancy

Legal / Compliance / Risk Management

Executing enhancement of corporate value and realization of Long-Term Vision

CEO

Group Chief Officer system: Strive to enhance Group governance by

strengthening collaborations among companies, optimizing resource allocation, etc.

CFO	CHRO	CCO	CTO
（Chief Financial Officer）	(Chief Human Resources Officer)	(Chief Compliance Officer)	(Chief Technology Officer)

Portfolio transformation, optimization of resource allocation, involvement in business strategies, monitoring of management progress

Business operation based on Group strategies and timely reporting/ execution of the Long-Term Vision and Medium-Term Management Plan

ENEOS

JX Nippon Oil & Gas Exploration

JX Advanced

Metals

ENEOS

Materials

ENEOS Power

ENEOS

Renewable Energy

Copyright © ENEOS Holdings, Inc. All Rights Reserved.

Non-financial Target②

9

• Reducing GHG Emissions
• Reduction of ENEOS' emissions (Scope 1＋2)

GHG			Assumed emissions according to demand for fuel	Actual emissions
Reductions
		Curbing emissions＋artificial fixation of CO2＋
(Mt/year)
					increase of natural absorption of CO2
40						19
20			36	25	19 ±0
			23
0
					-4
-20
						-19
			2013	2023	2030	2040
	(Base year, Actual) (Forecast)	(Target)	(Target)

Scope 1+2 Reducing emissions mainly through efficiency improvement of refineries, CCS, forest absorption to realize carbon neutrality in 2040

• Reducing emissions of GHG through efficiency improvement of refineries, etc. (presumption of FY2023: 2Mt reduction compared to FY2013）
• Commissioned feasibility study for implementation of advanced CCS business from JOGMEC to establish implementable CCS value chain by FY2030
• Joining both domestic and overseas projects to create and utilize forest absorption credits (0.2Mt/year)

Scope 3 Moving forward with Japanese government and other companies to realize carbon neutrality of the entire supply chain in 2050

• First oil company in Japan to construct a system for calculation and management of CFP by utilizing data collected at refineries to grasp and manage Scope 3 emissions

• Enhancing Employee Engagement and Group Human Resource Strategy
• Reforming environment to enable employees to work comfortably and with pride

・Analyzing questionnaires to employees, setting goals and measures to take in short/mid/long-term

・Executives commit to implement "executives change first" together with employees in managerial positions and execute dialogue with employees to close the gap between Management and employees

・Become a company which can make better corporate decisions from variety of opinions by respecting and listening to each other

Brushing up training,

360° feedback, coaching, etc.

Executives / Managerial Employees

Exchange opinions constructively
regardless of position
Realize ideal leadership and	Employees
followership

Regularly execute surveys on harassment and engagement

Reconstruct a comfortable and rewarding work environment

Develop, acquire and enhance human resources supporting "today's normal," taking the lead for "tomorrow's normal"

• Diversification, talent engagement and reskilling

We have set and are advancing quantitative targets for each business company

Note: Data and targets of ENEOS Corp., partly including ENEOS Corp. employees assigned to other companies

Number of female employees in managerial positions: 58 (target:≧100)	Percentage of male employees taking childcare leave: 81％ (target: ≧90％)
Number of mid-career-employed in managerial positions: 71 (target: ≧80)	Percentage of advanced digital personnel: 19％ (target: ≧20%)

Number of online learning support system users in total: 800 (target: ≧1,500)

• Human resource strategies and construction of succession plans under consideration by CHRO

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Financial Target Results and Forecasts①

10

FY2022

Actual

FY2023		FY2024		3rd Mid-Term
Actual		Forecast		Mgmt. Plan

				(FY2025)
ROIC 1, 2	3 %	5 %	5 %	7% or higher

（Group total WACC: 4%）

Net Income				(3-year total)
¥ 96.6 bn	¥ 237.9 bn	¥ 210.0 bn	¥ 700.0 bn
（Excl. inventory valuation）
				（FY2025）
ROE	3 %	8 %	7 %	10 % or higher
（Excl. inventory valuation）		（equity cost: 8%）
Net D/E Ratio	0.76	0.46	0.5	0.8 or lower
(After adjusting for hybrid bonds)
				（3-year total）
Free CF	- ¥ 306.6 bn	¥ 691.1 bn	¥ 150.0 bn	¥ 500.0 bn
(After the payment of lease debt)
1: Excluding incubation businesses	2: FY2024 forecast is estimated value

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