Kawasaki Kisen Kaisha, Ltd. · TSE:9107
Kawasaki Kisen Kaisha — Investor Presentation (May 2023)
68 slides from Kawasaki Kisen Kaisha's investor presentation, May 26, 2023
Slide 1: Business Briefing
Business Briefing May 26th, 2023
Slide 2: Agenda
AGENDA Opening Car Carrier Business Coal & Iron Ore Carrier Business LNG Carrier Business Sustainability Management
Slide 3: Today's Objective
Opening Today’s Objective Briefing on the growth strategy for growth-driver businesses and sustainability management, which are particularly important for the medium-term improvement of shareholder value Covered in the Financial Covered in this Business Briefing highlights brief report for FY2022 Su
Slide 4: Today's Agenda
Opening Today’s Agenda Topic Presenter Opening President & CEO Yukikazu Myochin Car Carrier Business Managing Executive Officer Takenori Igarashi Coal & Iron Ore Carrier Vice President Executive Officer Atsuo Asano Business LNG Carrier Business Senior Managing Executive Officer Kazuhiko Hari
Slide 5: Objective of the "K" Line Group
Opening Objective of the “K” Line Group Contribute to all stakeholders by improving corporate value Goals to achieve through Corporate Principle and Vision Economic Value Social Value Corporate Principle ~ trust from all over the world ~ “As a logistics company rooted in the shipping industry, we he
Slide 6: Earnings targets and performance progress
Opening Earnings targets and performance progress Focusing on businesses with role of driving growth, we will work to achieve our earnings targets ahead of schedule. “K” Line’s Own Businesses Total Strong start for the first year of the medium-term management plan. Efforts will be made for steady ac
Slide 7: Business Strategy: Importance and progress of each business
Opening Business Strategy:Importance and progress of each business Working on initiatives specific to each business according to its role under the medium-term management plan Smooth advancement of enhancement of partnerships with target customers based on environmental Coal & Iron Ore measures. Car
Slide 8: Business Strategy: Positioning of Growth-Driver Businesses
Opening Business Strategy:Positioning of Growth-Driver Businesses Businesses with the role of driving growth are businesses that can be expected to achieve sustainable growth and demonstrate our strengths, at the same time, whose characteristics such as timeline for realizing growth or volatility ar
Slide 9: Concept of Investment
Opening Concept of Investment Aiming to achieve both “continuous development of “K” Line Group” and “contribution to a sustainable society”, focusing on investments that contribute to improving corporate value Focusing 80% of Concentrating more than Concept of investment on role of half of investmen
Slide 10: Agenda
AGENDA Opening Car Carrier Business Coal & Iron Ore Carrier Business LNG Carrier Business Sustainability Management
Slide 11: Index
Index 1. 2. 3. 4. 5. Business Market Trends Business Investment Targets and Characteristics Strategy Plan Progress 10
Slide 12: Characteristics of Car Carrier Business
Chapter 1. Business Characteristics Characteristics of Car Carrier Business 1. Business 2. Market 3. Business 4. Investment 5. Targets and Characteristics Trends Strategy Plan Progress Car carrier business is supported by solid demand, based on trusting relationship with customers, requiring balance
Slide 13: Demand Outlook
Chapter 2. Market Trends Demand Outlook 1. Business Characteristics 2. Market Trends 3. Business Strategy 4. Investment Plan 5. Targets and Progress Marine transport demand is expected to increase by about 14% by 2026 with the recovery and growth of auto sales, with solid growth expected to 2030 Mar
Slide 14: Supply and Demand Outlook
Chapter 2. Market Trends Supply and Demand Outlook 1. Business Characteristics 2. Market Trends 3. Business Strategy 4. Investment Plan 5. Targets and Progress The industry is gradually introducing new vessels, but supply shortage is expected to continue until around 2025. Additional orders for new
Slide 15: Business Strategy Overview
3. Business Strategy Business Strategy Overview 1. Business Characteristics 2. Market Trends 3. Business Strategy 4. Investment Plan 5. Targets and Progress Promote sustainable growth with strong customer base together with balanced route design and fleet development Appropriately balance the market
Slide 16: Business Strategy Progress and Outlook
3. Business Strategy Business Strategy Progress and 1. Business 2. Market 3. Business 4. Investment 5. Targets and Outlook Characteristics Trends Strategy Plan Progress Recovered the balance between route, fleet, and customers through profitability achieved with modified route design based on strong
Slide 17: Investment Policy / Plan
Chapter 4. Investment Plan Investment Policy / Plan 1. Business Characteristics 2. Market Trends 3. Business Strategy 4. Investment Plan 5. Targets and Progress Develop a competitive fleet for balanced growth with disciplined investment to promote realizing sustainable business management Concept of
Slide 18: Target and Progress for Key Indicators
Chapter 5. Targets and Progress Target and Progress for Key 1. Business 2. Market 3. Business 4. Investment 5. Targets and Indicators Characteristics Trends Strategy Plan Progress Setting 56 million m3 as target for transport volume in FY26. For FY30, forecasting further transport volume. Recovery o
Slide 19: Key Points of Briefing
Key Points of Briefing Build a strong customer base by creating mutually trusting relationship by 1 leveraging the strength of customer-oriented sales in a market involving direct interaction between customers and shipping company to meet our social mission to support the supply chain for the auto i
Slide 20: Agenda
AGENDA Opening Car Carrier Business Coal & Iron Ore Carrier Business LNG Carrier Business Sustainability Management
Slide 21: Index
Index 1. 2. 3. 4. 5. Business Market Trends Business Investment Targets and Characteristics Strategy Plan Progress 20
Slide 22: Characteristics of Coal & Iron Ore Carrier Business
Chapter 1. Business Characteristics Characteristics of Coal & Iron Ore 1. Business 2. Market 3. Business 4. Investment 5. Targets Carrier Business Characteristics Trends Strategy Plan and Progress Coal & iron ore carrier business has significantly different contract formats based on customer attribu
Slide 23: Coal & Iron Ore Carrier Business's Earnings Structure
Chapter 1. Business Characteristics Coal & Iron Ore Carrier Business’s 1. Business 2. Market 3. Business 4. Investment 5. Targets Earnings Structure Characteristics Trends Strategy Plan and Progress Contributed to earnings by accumulating market-linked earnings such as from major resources companies
Slide 24: Volatility Measures
Chapter 1. Business Characteristics Volatility Measures 1. Business Characteristics 2. Market Trends 3. Business Strategy 4. Investment Plan 5. Targets and Progress Promote earnings stability in addition to enhancing profitability with fleet development that balances the long/short of the cargo cont
Slide 25: Demand Outlook
Chapter 2. Market Trends Demand Outlook 1. Business Characteristics 2. Market Trends 3. Business Strategy 4. Investment Plan 5. Targets and Progress Marine transport volume has entered a demand recovery period from mid-2023; overall volume is flat to slight increase with emerging regions such as Ind
Slide 26: Supply and Demand Gap Outlook
Chapter 2. Market Trends 4. 1. Business 2. Market 3. Business 5. Targets Supply and Demand Gap Outlook Characteristics Trends Strategy Investment Plan and Progress Supply is expected to remain flat to slightly decrease due to the effect of environmental regulation in addition to scrapping of aged ve
Slide 27: Outlook for Expansion of Eco-friendly Vessels
Chapter 2. Market Trends Outlook for Expansion of Eco-friendly 1. Business Characteristics 2. Market Trends 3. Business Strategy 4. Investment Plan 5. Targets and Progress Vessels Demand for new fuel vessels have increased in all segments across Japanese and Korean steel mills, other overseas mills
Slide 28: Business Strategy Overview
3. Business Strategy Business Strategy Overview 1. Business Characteristics 2. Market Trends 3. Business Strategy 4. Investment Plan 5. Targets and Progress Aim at sustainable earnings growth by maintaining earnings base from Japanese and Korean steel mills and securing long-term contracts from mill
Slide 29: Environment-Oriented Sales
3. Business Strategy 1. Business 2. Market 3. Business 4. Investment 5. Targets and Environment-Oriented Sales Characteristics Trends Strategy Plan Progress Aim at sustainable earnings growth by expanding stable earnings base and improving transport efficiency through enhancement of collaborations f
Slide 30: Investment Policy / Plan
Chapter 4. Investment Plan Investment Policy / Plan 1. Business Characteristics 2. Market Trends 3. Business Strategy 4. Investment Plan 5. Targets and Progress Aim to develop a competitive fleet at appropriate cost by thorough management of fleet size, procurement cost, and ownership format Investm
Slide 31: Asset Efficiency
Chapter 4. Investment Plan Asset Efficiency 1. Business Characteristics 2. Market Trends 3. Business Strategy 4. Investment Plan 5. Targets and Progress Realize high asset efficiency in addition to market resilience by building new fuel ships required for sustainable earnings growth and developing a
Slide 32: Target and Progress for Key Indicators
Chapter 5. Targets and Progress Target and Progress for Key 1. Business Characteristics 2. Market Trends 3. Business Strategy 4. Investment Plan 5. Targets and Progress Indicators Making steady progress to achieve the Medium-term Management Plan targets; aim at sustainable earnings growth for FY26 o
Slide 33: Key Points of Briefing
Key Points of Briefing Realize sustainable earnings growth by increasing medium- to long-term contracts with steel mills in India and Middle East that are expected to grow 1 and major resources companies in addition to the long-standing relationship with Japanese and Korean steel mills Further enhan
Slide 34: Agenda
AGENDA Opening Car Carrier Business Coal & Iron Ore Carrier Business LNG Carrier Business Sustainability Management
Slide 35: Index
Index 1. 2. 3. 4. 5. Business Market Trends Business Investment Targets and Characteristics Strategy Plan Progress 34
Slide 36: Strategic Category of LNG Carrier Business
Chapter 1. Business Characteristics Strategic Category of LNG Carrier 1. Business 2. Market 3. Business 4. Investment 5. Targets and Business Characteristics Trends Strategy Plan Progress "K" Line aims at “long-term stable” strategy leveraging customer-oriented capabilities and focusing on energy re
Slide 37: Earnings structure of LNG carrier business
Chapter 1. Business Characteristics Earnings structure of LNG carrier 1. Business Characteristics 2. Market Trends 3. Business Strategy 4. Investment Plan 5. Targets and Progress business Maintained profitability regardless of market conditions for the past decade, contributing as an earnings base f
Slide 38: LNG Demand Outlook
Chapter 2. Market Trends LNG Demand Outlook 1. Business Characteristics 2. Market Trends 3. Business Strategy 4. Investment Plan 5. Targets and Progress LNG demand is expected to increase steadily to 2030, 2040 due to the increase in demand by emerging countries and the timing of expansion of altern
Slide 39: LNG production and consumption forecast by region
Chapter 2. Market Trends LNG production and consumption 1. Business Characteristics 2. Market Trends 3. Business Strategy 4. Investment Plan 5. Targets and Progress forecast by region Production increase in North America and Qatar, consumption is expected to increase mainly in emerging regions such
Slide 40: Vessel Supply and Demand Outlook
Chapter 2. Market Trends Vessel Supply and Demand Outlook 1. Business Characteristics 2. Market Trends 3. Business Strategy 4. Investment Plan 5. Targets and Progress Order for new ships are increasing with expectation for solid growth of LNG transport demand, resulting in tight shipbuilding capacit
Slide 41: "K" Line Business Strategy
3. Business Strategy "K" Line Business Strategy 1. Business Characteristics 2. Market Trends 3. Business Strategy 4. Investment Plan 5. Targets and Progress Basic concept is to work with trusted partners to increase the share of business for each customer through customer-oriented sales Maintain and
Slide 42: Latest Progress
3. Business Strategy Latest Progress 1. Business Characteristics 2. Market Trends 3. Business Strategy 4. Investment Plan 5. Targets and Progress Successful long-term contract with QatarEnergy which offers the largest business scale, and making progress in building results such as with PETRONAS in e
Slide 43: Enhance System for Emerging Regions
3. Business Strategy Enhance System for Emerging Regions 1. Business Characteristics 2. Market Trends 3. Business Strategy 4. Investment Plan 5. Targets and Progress As part of "K" Line’s strength of customer support that combines technology and sales, established ship management site in Singapore a
Slide 44: Investment Policy / Plan
Chapter 4. Investment Plan Investment Policy / Plan 1. Business Characteristics 2. Market Trends 3. Business Strategy 4. Investment Plan 5. Targets and Progress Planning investment of about 160.0 billion yen during the Medium-term Management Plan period by making investment decisions based on risk m
Slide 45: Targets and Progress for Key Indicators
Chapter 5. Targets and Progress Targets and Progress for Key 1. Business Characteristics 2. Market Trends 3. Business Strategy 4. Investment Plan 5. Targets and Progress Indicators In addition to business expansion in Qatar, making steady progress on strengthening customer base in emerging regions w
Slide 46: Key Points of Briefing
Key Points of Briefing Stable earnings contribution during and after the Medium-term Management Plan 1 period through long-term stable business model that prepares ships based on long-term contracts with specific customers Aim at medium- to long-term increase in the size of earnings contribution by
Slide 47: Latest Results: Long-term charter agreement with Diamond Gas International
Appendix Latest Results: “K” Line concluded long-term charter agreement with Diamond Gas International Pte. Ltd. Outline of new time charter agreement • We concluded 15-year long-term time charter contract (with an option to extend the contract up to 10 additional years) with Diamond Gas Internation
Slide 48: Agenda
AGENDA Opening Car Carrier Business Coal & Iron Ore Carrier Business LNG Carrier Business Sustainability Management
Slide 49: Vision of "K" Line's Sustainability Management
Sustainability management Vision of "K" Line’s Sustainability Management realizing our Sustainable creation of economic and social values by balancing outcorporate continuousprinciple/vision developmentto ofbalance "K" Line continuous developmenttoofsustainable Group and contribution "K" Line Group
Slide 50: "K" Line's Sustainability Management
Sustainability management "K" Line’s Sustainability Management To realize corporate principle/vision, promote sustainability management with “Materiality” at the core. Goals Vision of "K" Line’s Sustainability Management Materiality “Environment/ “Safety/Quality” “Human Resources” Technology” Enviro
Slide 51: Objective of the "K" Line Group
Environmental protection rooted in low-carbon/decarbonization Objective of the "K" Line Group Refine the environmental response expertise/solutions with customers and partners to lead the entire shipping industry by establishing sustainable competitive advantage to be balanced with earnings growth L
Slide 52: Low-carbon/decarbonization Targets
Environmental protection rooted in low-carbon/decarbonization "K" Line Low-carbon/decarbonization Targets Aim at unique target beyond the IMO standards presented in "K" Line Environmental Vision 2050 to realize competitive advantage through industry-leading active environmental measures Realized clo
Slide 53: Summary of Low-carbon/decarbonization Initiatives
Environmental protection rooted in low-carbon/decarbonization Summary of Low-carbon/decarbonization Initiatives Promoting emission reduction measures for “K” Line low-carbon/decarbonization and low-carbon/decarbonized society. Invest total of 375.0 billion yen by 2026 Investment GHG emissions KPI fo
Slide 54: Road Map for Low-carbon/decarbonization
Environmental protection rooted in low-carbon/decarbonization Road Map for "K" Line Low-carbon/decarbonization Path and achievement of 2030 targets have become clear. Promote detailed review toward 2050 "K" Line CO2 emission (Scope 1+2) 効率運航による削減 Reduction with efficient operation Seawingによる削減 Reduc
Slide 55: Initiatives for Low-carbon/decarbonized Society
Environmental protection rooted in low-carbon/decarbonization Initiatives for Low-carbon/decarbonized Society Leverage the abundance of expertise accumulated through marine transportation business to participate in businesses that contribute to low-carbon/decarbonized society Participating in liquef
Slide 56: Initiatives on Biodiversity
Environmental protection rooted in low-carbon/decarbonization Initiatives on Biodiversity Aim for zero environmental impact on sea and air and be the industry leader in biodiversity protection KPIs for Biodiversity Zero oil spill accidents 100% ballast water treatment system installation by June 202
Slide 57: Target and Objective for Safety in Navigation
Safety in Navigation Target and Objective for Safety in Navigation As the most essential responsibility of "K" Line, putting customers first, provide industry leading safe and optimal service with unique safety and quality policy as a guideline that surpasses legal requirements Establish safe, relia
Slide 58: Initiatives for Enhancing the System for Safety in Navigation
Safety in Navigation Summary of Initiatives for Enhancing the System for Safety in Navigation Build a solid system for safety in navigation with safety and quality management leveraging the “human capabilities” which is the strength of "K" Line, complemented with advanced digital technology Providin
Slide 59: Safety in Navigation Initiatives Supported by People
Safety in Navigation Safety in Navigation Initiatives Supported by People Develop “people” who are central to supporting safety in navigation and “people” to play the central role in building and operating the standards and systems to ensure safety Safety in navigation supported by people Global mon
Slide 60: Systems and Infrastructure Using Advanced Digital Technology
Safety in Navigation Development and Expansion of Systems and Infrastructure Using Advanced Digital Technology In addition to reducing work burden with navigation support, apply advanced digital technology in areas of monitoring, prediction, and prevention to complement “human capabilities” and real
Slide 61: Objective for Recruiting and Developing Human Resources
Human Resources Objective for Recruiting and Developing Human Resources Through relentless effort as a business in charge of basic infrastructure for the global society, lead the sustainable growth and innovation and flexibly respond to changes in the business environment Diversity＆ Inclusion Human
Slide 62: Human Resources Management
Human Resources Human Resources Management Hire and develop human resources who can lead business growth and innovation, and are capable of flexibly responding to change in business environment Flexibly respond to changes in the business Lead business growth and innovation environment Develop profes
Slide 63: Diversity & Inclusion / Safe and Comfortable Environment
Human Resources Diversity＆ Inclusion/Establishment of Safe and Comfortable Environment Aim at a safe and comfortable environment where onshore and offshore personnel with diverse values and different nationality, gender can make full use of their skills Diversity & Inclusion Establishment of safe an
Slide 64: Enhancement of Corporate Governance
Governance Enhancement of Corporate Governance Strengthen corporate governance to reinforce the supervisory function and enhance effectiveness of the Board of Directors to improve corporate value Our vision • The Board of Directors have a “supervisory function” on the business execution by directors
Slide 65: Key Initiatives to Enhance Corporate Governance
Governance Key Initiatives to Enhance Corporate Governance Review the composition of the Board of Directors to enhance independence of the supervisory function and ensure diversity of skills, and develop incentives and frameworks that support improvement of corporate value and sustainable growth Rev
Slide 66: Sustainability Management Promotion System
System and Framework Sustainability Management Promotion System Build a system for "K" Line management to responsibly promote establishment and realization of sustainable growth strategy Board of Directors Supervise Reflect on management decision making Management Conference – Management decision ma
Slide 67: KPI and Milestones for Sustainability Management
Appendix KPI and Milestones for Sustainability Management (Results/Targets) Theme Category KPI FY22 Target Result CO2 emission efficiency (vs 2008) 42% improvement 50% reduction by 2030 indicators Total CO2 emission volume (vs 2008) 51% reduction Achieve net zero by 2050 Fuel Number of LNG/LPG fuele
Slide 68: The 12 material issues identified in FY2022
Appendix The 12 material issues identified in FY2022 Material issues Category (actions for resolving social issues) Related SDGs Management Respect for human rights base Reinforcement of corporate governance Promotion and reinforcement of compliance Safety/Ship quality Promotion of safety in navigat
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