Mitsui O S K Lines : New MOL Corporate Mission/MOL Group Vision and Outline of Rolling Plan 2021

April 04, 2021 at 08:02 pm EDT

New MOL Corporate Mission

/ MOL Group Vision

and Outline of Rolling Plan 2021

April 5, 2021

Mitsui O.S.K. Lines, Ltd.

Security Code: 9104

TEL: +81 3 3587 6224 iromo@molgroup.com

Contents

New MOL Corporate Mission and MOL Group Vision
Outline of Rolling Plan 2021
Questions and Answers

References

1. New MOL Corporate Mission and

MOL Group Vision

The Background of Reviewing MOL Group Corporate Mission / MOL Group Vision

Changing social demands：

A rapid rise in environmental awareness, including quickly accelerating decarbonization
Expectations for corporate contribution to SDGs and social sustainability

Changes within MOL：

Reaching a new stage after business expansion in 2000s, structural reforms in 2010s
Pursuit of higher group- wide competitiveness

Need for review of MOL Group Corporate

Mission / MOL Group Vision

* In addition, we have reviewed the MOL Group Values "MOL CHART"

New MOL Corporate Mission and MOL Group Vision

					As a multi-modal transport group, we will:
			Group		1) actively contribute to global economic growth and development, anticipating the
				needs of our customers and the challenges of this new era
			Corporate
				2) strive to maximize corporate value through creativity, operating efficiency and
			Mission
				promotion of ethical and transparent management
			(2001~)
		OLD		3) nurture and protect the natural environment by maintaining the highest

				standards of operational safety and navigation
			Long-term		To develop the MOL Group into an excellent and resilient organization that leads
			Vision
				the world shipping industry
			(2001~)

			MOL CHART	Challenge／Honesty／Accountability／Reliability／Teamwork
			(2015~)

【Revised on April 1, 2021】
		Group	From the blue oceans, we sustain people's lives and ensure a prosperous
		Corporate
		future.
		Mission

				We will develop a variety of social infrastructure businesses in addition to
NEW	Group	traditional shipping businesses and will meet the evolving social needs
including environmental conservation, with innovative technology and
Vision	services.
				MOL group aims to be a strong and resilient corporate group that provides
				new value to all stakeholders and grows globally.
		MOL	Challenge／Honesty／Accountability／Reliability／Teamwork
		CHARTS	＋	Safety（Pursue the world's highest level of safety culture）

Enhancement of Initiatives on Sustainability Issues

Review of sustainability issues

We will review some of the social issues the MOL Group aims to address through our business (= sustainability issues) and establish KPIs as soon as possible within FY2021.

Sustainability Issues (Materiality)

・Value-Added Transport Services

・Marine and Global Environmental Conservation

・Innovation for Development in Marine Technology

・Human Resource Cultivation and Community Development ・Governance and Compliance to Support Businesses

Reorganization of sustainability promotion structure
The Environmental Management Committee is reorganized as the "Environment and Sustainability Committee"
⇒The scope is expanded to overall sustainability
The Environment & Sustainability Strategy Division is newly established

Enhancement of corporate governance structure
The "Corporate Governance Council" is newly established under the Board of Directors.
⇒The role is to study and propose improvements for overall governance, assess the effectiveness of the Board of Directors, and strengthen the internal control system.

Overview of how each concept relates

Why MOL Exists /	What MOL Will Do		What MOL Will Achieve
What MOL Values


Mission	Business Plan "Rolling Plan 2021"		Vision
Corporate Mission				Group Vision
From the blue				【10-Year Vision】

oceans, we sustain				We will develop a variety of
people's lives and
			social infrastructure
ensure a prosperous				businesses in addition to
future.				traditional shipping
				businesses, and will meet

				the evolving social needs
				including environmental
		Increasing Corporate Value
Values		conservation, with
				innovative technology and
MOL CHARTS
			services. MOL group aims to
Challenge	Sustainability Issues (Materiality)
	be a strong and resilient
Honesty	・Value-Added Transport Services		corporate group that
Accountability	・Marine and Global Environmental Conservation		provides new value to all
	stakeholders and grows
Reliability	・Innovation for Development in Marine Technology
	globally.
Teamwork	・Human Resource Cultivation and Community Development

Safety	・Governance and Compliance to Support Businesses

Embody the MOL Group Corporate Mission and act upon a specific strategy-RP2021 and sustainability issues-to achieve the MOL Group Vision, based on MOL CHARTS, our shared sense of values.

２．Outline of Rolling Plan 2021

Review of Rolling Plan 2020

Topic	Our goals in Rolling Plan 2020	Achievements in fiscal year 2020

Defensive	Reducing market exposure	Reduced total of 17 vessels
measures

Business		Updated the megatrend forecasts in December 2020 (in which
environment	Conducting megatrend forecasts
estimating an earlier recovery)
analysis
	Growth strategies/structural	- Bulkers：Launched MOL Drybulk Ltd.
Offensive	- Car Carriers：Pursuing further productivity through
reforms based on each business		integration with NMCC
measures	-
characteristics	MOLCT：Improved efficiency through integration of
			organizations and overseas offices
Portfolio	Carefully select new investment	While deciding new investment of approx. ¥90 billion,
Strategies	and secure total FCF of ¥100	promoted to generate cash from assets and businesses.
	billion from FY2020 to FY2022	Maintain FCF target of ¥100 billion and consider accumulating
		more CF for new investment.
	Focusing investments on	Investing ¥43 billion including additional contribution to
	Offshore businesses	existing businesses (Included in the above ¥90 billion)
Business	Improving customer satisfaction	Expanding "MOL Lighthouse" services to broader customers
Strategies	by "digital and environment"
Environmental	Promotion of	- Continue investing in LNG, wind power generation fields
Strategies	environment/emission-free	- Environmental vision under review in response to recent
	businesses		global trends
Enhancement of	Project promotion through cross-	- Launched 16 new project teams
organizational	organizational collaboration	-	Rationalizing administration work
strength	Group-wide improvement in	- Integration of group companies
	productivity
			9

Rolling Plan 2021 Business Environment Assumptions

(Megatrend Forecast)

Rolling Plan 2021 is built on the following assumptions. Updates on megatrend forecasts are going to be made regularly in fiscal 2021.

Rolling Plan 2020 Assumption				Rolling Plan 2021 Assumption
Sea-trade	2020	2021	2022	Recovery to	Sea-trade	2020	2021	2022	2023	Recovery to
2019 level		2019 level

GDP growth rate	-5.0%	3.0%	2.0%
Crude Oil	-7.6%	4.3%	0.8%	2023 or later
LNG	-1.5%	4.3%	4.3%	2021
Steaming Coal	-6.3%	2.7%	-0.8%	2023 or later
Iron Ore	-4.2%	2.4%	3.2%	2022
Coaking Coal	-3.6%	-1.0%	1.0%	2023 or later
Grain	-0.1%	4.9%	4.2%	2020
Car	-25.0～	10.4%	6.8%	2023 or later
	-35.2%			2022
Containers	-25.0%	18.2%	12.2%
				(delay concerned)

GDP Growth rate*	-3.5%	3.0%	2.5%	2.5%
Crude Oil	-8.0%	2.6%	5.3%	1.8%	2023 (improved)
LNG	2.2%	3.8%	3.7%	3.6%	2020 (improved)
Steaming Coal	-11.1%	2.5%	0.0%	0.3%	Gradually decrease
Iron Ore	2.1%	-1.8%	-1.6%	-1.3%	Concerned to decrease
					from 2021
Coaking Coal	-13.9%	7.1%	0.1%	0.3%	2024 or later (worse)
Grain	5.1%	3.2%	1.4%	1.7%	2020 (improved)
Car	-23.0%	11.8%	7.7%	4.3%	2023 (improved)
Containers	-2.0%	0.5%	2.5%	2.5%	2022 (improved)

【Energy Transport】

Demand for crude oil transport has decreased significantly due to the rapid decline in oil demand in 2020, but crude oil cargo volume will increase in proportion to the recovery of crude oil demand after 2021.
The consumer sector accounts for a large percentage of natural gas demand, which remained firm even during the COVID-19 pandemic, so the impact on LNG trade remains relatively low.
Steaming coal demand in 2020 decreased significantly. The trade will decline in the mid-to-long-term due to accelerating decarbonization.

* 2020 GDP from IMF Report / 2021-23 GDP from MOL Megatrend team projection

【Drybulk】	【Product Transport】
 Currently, China's crude steel	 The decrease in automobile
transport is less than expected,
production and iron ore import
and cargo trade volume will
volume continue to increase but
generally recover to the level of
will turn downward in 2021.
2019 in 2023.
 Grain cargo volume continues
 In container transportation, the
to increase without impact from	downward rigidity of cargo
the COVID-19 pandemic.	movement is stronger than
	expected, and cargo movement in
	2020 remained only 2% lower than
	the previous year. It will generally
	return to normal conditions
	following the economic growth
	after 2021.
	© 2021 Mitsui O.S.K. Lines, Ltd. 10

Outline of the overall strategy

＜(Repost) Relationship diagram of concepts＞

Mission

Corporate Mission

From the blue oceans, we sustain people's lives and ensure a prosperous future.

Values

MOL CHARTS

Challenge

Honesty

Accountability

Reliability

Teamwork

Safety

Business Plan "Rolling Plan 2021"		Vision
			Group Vision
			【10-Year Vision】
			We will develop a variety of
			social infrastructure
			businesses in addition to
			traditional shipping
			businesses, and will meet

			the evolving social needs
			including environmental
	Increasing Corporate Value
	conservation, with
			innovative technology and
			services. MOL group aims to
Sustainability Issues (Materiality)
	be a strong and resilient
・Value-Added Transport Services		corporate group that
・Marine and Global Environmental Conservation		provides new value to all
	stakeholders and grows
・Innovation for Development in Marine Technology
	globally.
・Human Resource Cultivation and Community Development
・Governance and Compliance to Support Businesses

Outline of the overall strategy

Key features of this fiscal year

are environmental strategy x regional strategy

Environmental Strategies (Strengthening the

Environmental Perspectives in Three Core Strategies)

We will invest approximately ¥200 billionin low carbon/decarbonization fields over three years from FY2021 to FY2023


	Main Initiatives

Environmental	Revise the MOL Group environmental vision 2.0 to 2.1 and
strategy	accelerate initiatives (scheduled to announce the details in June)
	 Moving up the net GHG emission zero schedule (by 2050)
	 Develop a GHG reduction roadmap
	 Introduction of internal carbon pricing
	 Promoting alternative fuel, operational efficiency, energy conservation
Portfolio	Expand "low environmental impact" and "low carbon" businesses
strategy	 Taking in increasing LNG demand (LNG carriers, FSRUs, powerships)
	 Enter offshore wind power business

Business strategy

Realize stress-free services, by responding to customer's desire to "see"

Develop services that visualize the environmental impact and reduction effects

Disclose carbon footprint in anticipation of customer needs and develop systems and data to enable that disclosure
Improve operational efficiency and visualize how much it contributes to GHG emission reduction

Regional Strategy (as core business strategy)

The core of our business strategy will be "Regional Strategy." We will pursue potential projects in multifaceted ways that match our overall strategy and acquire large-scale projects not limited to transportation focusing in Asia by demonstrating MOL Group's collective strength.

Head Office sales

divisions

Overseas sales

divisions

Identify potential

projects that

match our overall

strategy

Realize new businesses by strengthening cooperation among divisions and overseas subsidiaries

Further promote "ONE MOL" concept
Enhance internal resources
Expand collaboration area with external partners

Accelerate decision making process by introducing "lead sprints"

Acquire

large-

scale

projects

(not

limited to transport)

Other Specific Initiatives

Realizing "optimal portfolio" and "stress-free services"

continues to be our important themes


	Main initiatives
Portfolio	 Continually review and adjust portfolios
Strategy	 Re-evaluate existing ocean shipping businesses from the
	viewpoint of contribution to cash flow

Business	 Cooperating in sales activities in LNG-related area (LNG
Strategy	carriers, FSRUs, powerships)
Realize stress-free services,	 One-stop sales structure (MOL Drybulk Ltd.)
by going ahead of	 Improve customers convenience through Digital
customer needs	Transformation (DX)

Profit Plan

Since the launch of our Rolling Plan, we have maintained our target to achieve recurring profit levels of 80 to 100 billion yen in the medium term. This profit level is expected to be achieved between FY 2021 and FY 2023.
The full profit plan for Rolling Plan 2021 is scheduled to be announced on Friday, April 30 along with the full-year results for fiscal year 2020.

		FY2021		FY2022	FY2023	FY2027

Dry Bulk Business

(Iron Ore Carriers, MOL Drybulk)

Energy and Offshore Business
(Tankers, Steaming Coal Carriers, LNG Carriers,
Offshore business)
Product Transport Business			To be disclosed on April 30
(PCC, Terminal & Logistics, Containerships, Ferries &
Coastal Roro Ships)
Associated Businesses
(Real estate, Tug boats, Trading, Cruise ship, etc.)
Others/Adjustments

Total Ordinary Profit		Projected	Medium-term	Levels, ¥80
	～100 billion is likely to be achieved

Financial Strategies / Investment Plans

"Generating cash from assets, businesses, and projects" and "Accumulating Free Cash Flow of ¥100 billion from FY2020 to 2022" outlined in Rolling Plan 2020 are steadily in progress.
FY 2020 results and future plans are scheduled to be disclosed on April 30.

				Secure ¥100 billion Free CF in three years
(Unit: ¥ million)
2,200	CFs from operating activities	▲1,983
2,000

CFsfrom investing activities
1,800

1,600
1,400				1,007 ▲1,072
1,200	983	▲1,008
1,000

800		552
600

400
200
0	FY2017	FY2018	FY2019	FY2020	FY2021	FY2022

3．Questions and Answers

References

【Reference1】 Revision of MOL CHART

The current MOL Group values, MOL CHART is revised to MOL CHARTS by adding an "S" for "Safety," to reflect our ongoing commitment to pursuing the world's highest level of safety, and the definition of "R" is changed to reaffirm that the range of "Reliability" covers all stakeholders.

Safety


OLD	N/A (safety is mentioned in Reliability)
NEW	Pursue the world's highest level of safety culture
		Maintain a safety-first attitude and strive to reinforce safety awareness.
		Return to basics by comprehending workplace safety.

Reliability


OLD	Gain the trust of customers
		Provide the highest level of safety and service.
NEW	Gain the trust of stakeholders
		See things from the customers' perspective and deliver service that
		exceeds their expectations.
	 Seize the initiative in social issues and take responsibility for your behavior.

【Reference2】 Pursue World's Highest Level of Safety Quality

After the incident off Mauritius, we reviewed the internal safe operation system and established measures to prevent the reoccurrence of such incidents in December. In FY2021 and beyond, we will continue to forge ahead with company-wide preventive measures as follows.


Measures to		Main content		Progress
prevent
reoccurrence
Enhance skills of	•	Improve safety awareness of	•	Thoroughly disseminate the outline and cause of the incident
seafarers and ensure		seafarers		throughout the group, including chartered vessels
their safety-related	•	Improve knowledge of facilities	•	Produce and distribute video educational tools related to
behavior	•	Strengthen our involvement in		electronic nautical charts
		selection of seafarers for charter	•	Review qualifications of chartered vessels' seafarers manned by
		vessels		shipowners to ensure that they meet our standards
Select shipowners and	•	Review quality standards	•	Review hardware/software quality standards
ship management	•	Reinforce ship inspections	•	Reinforce ship inspection procedures
companies and	•	Introduce third-party evaluation	•	Strengthen involvement in substandard chartered vessels
establish evaluation		of shipowners and MOL safety	•	Start discussions with risk management certificate institutes
methods		management system
Review ship operations	•	Education and collaboration for	•	Study ship operation specialist system, enhance cooperation
and strengthen		ship operation-related parties		with SOSC
support system from	•	Enhance support by SOSC	•	Increasing the number of SOSC staff, reinforce monitoring
shore side	•	Safer navigation and route		system
		selection	•	Conducted demonstration test of operational status monitoring
	•	Matching safety awareness with		tool with NAPA; also agreed to jointly develop navigation risk
		shipowners of chartered vessels		monitoring system
			•	Standardize procedures of checking navigation routes and
				shipping instruction contents
			• Conduct survey of present situation
Other hardware		Enhance ship communication	•	Installation of satellite communication facilities on owned
responses		facilities		vessels completed
			• Began encouraging chartered vessel shipowners to install the
				facilities	21

【Reference3】 Mauritius Environment/Social Contribution

Activities

1) Overall scale of ¥800 million for Japan Foundation (charitable trust) and Mauritius Foundation (relief fund) combined

- Mauritius Foundation is preceding ahead, and will be established within the next several weeks, scheduled to start the relief funding in this summer

- Japan Foundation's application has been submitted to the relevant authorities for establishment and is in the process of being established

2) Various support activities in close proximity to local communities by MOL Mauritius (subsidiary)

＜Mauritius Support Project＞
	Natural environmental	Contribution to
	protection/recovery projects	community-based industry

Mangrove forests

reefs Coral

birds Wild

Other

Fishery

Tourism	Culture/ Education	Development
		Community

Other

Total scale of	Japan Foundation
¥800 million	MOL Mauritius-led relief fund

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Disclaimer

Mitsui OSK Lines Ltd. published this content on 05 April 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 April 2021 00:01:02 UTC.

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