Idemitsu Kosan Co., Ltd. · TSE:5019

Idemitsu Kosan — Q3 FY2021 Earnings Presentation

35 slides from Idemitsu Kosan's earnings presentation, Feb 8, 2022

  1. Slide 1: Presentation on Results for the 3rd Quarter FY2021

    Presentation on Results for the ３rd Quarter FY2021 February 8, 2022 Idemitsu Kosan Co.,Ltd.

  2. Slide 2: Table of Contents

    Table of Contents  Executive Summary  FY2021 3rd Quarter Results  Reference Materials 2

  3. Slide 3: Executive Summary

    €& idemitsu mExecutive Summary # © Idemitsu Kosan Co, Ltd. All Rights Fi

  4. Slide 4: Executive Summary

    Executive Summary  FY2021 3Q Financial Results  Income increased year-on-year, mainly due to improved performance in the resources business due to strong resource prices and to improved inventory impact [¥ billions] FY2020 3Q FY2021 3Q Change Operating Income + Equity Income 13.4 297.3 +283.9 Excl

  5. Slide 5: FY2021 3rd Quarter Results

    FY2021 3rd Quarter Results 5

  6. Slide 6: Key Topics

    Key Topics  Trends in petroleum demand  3Q demand for the 4 core products was 96.6% of the previous year, due to strong heating demand in the previous year and delays in demand recovery following the lifting of the state of emergency  Jet fuel remains on a recovery trend [％] FY2021 FY2021 FY2021

  7. Slide 7: Key Topics

    Key Topics  TV spotlight on environmental efforts based on our agri-bio technology  One major theme at COP26 held in November 2021 was the need to reduce methane gas  Our cashew nut shell liquid (CNSL) agent Ruminap (see below for details) was introduced as fodder which can reduce methane arising

  8. Slide 8: Operating Environment

    Operating Environment Dubai Crude Oil Australian Coal Exchange Rate Price Spot price (USD) [USD/bbl] [USD/ton] [JPY/USD] 90.0 240.0 115.0 80.0 220.0 113.0 113.7 78.3 200.0 70.0 183.9 71.7 180.0 60.0 66.9 111.0 60.0 160.0 167.5 50.0 110.1 140.0 109.0 109.5 40.0 44.6 42.9 120.0 30.0 107.0 107.6 100.0

  9. Slide 9: Overview

    Overview  Crude Oil / Coal / Exchange Rates [USD/bbl, USD/ton, JPY/USD] FY2020 3Q FY2021 3Q Change Crude Oil (Dubai) 39.4 72.3 32.9 +83.5% Crude Oil (Brent)* 40.8 67.7 26.9 +65.9% Thermal Coal * 58.1 121.7 63.6 +109.5% Exchange Rate (TTM) 106.1 111.1 5.0 +4.7% *Brent prices and Australian coal pric

  10. Slide 10: Segment Information

    Segment Information  Operating Income + Equity Income [￥billions] FY2020 3Q FY2021 3Q Change Petroleum 5.5 236.8 231.2 － Excluding inventory impact 64.9 73.7 8.8 +13.5% Basic Chemicals (1.0) 7.6 8.6 － Functional Materials 9.5 14.2 4.7 +49.4% Power and Renewable Energy (1.7) (7.6) (5.8) － Resources*

  11. Slide 11: Segment Information

    Segment Information  Factors Affecting Operating Income + Equity Income (excluding inventory impact, year on year) [￥billions] Price Price Volume Performance FX etc. Margin Chemicals Margin etc. Volume (time lag) Volume Equity income FX etc. Cost Power etc. etc. Fuel cost Oil Exploration Etc. and P

  12. Slide 12: Segment Information: Petroleum

    Segment Information [Petroleum] YoY ＋¥8.8 bn (FY20 3Q：¥64.9bn ➡ FY21 3Q：¥73.7 bn) <Year-on-year Change in Petroleum <Trends in Domestic Refining Margins*> sales volume (4 Core Products)> *Average of gasoline, diesel oil, kerosene, and heavy oil A margins (domestic spot –crude oil) (YoY) 101.2% 98.6%

  13. Slide 13: Segment Information

    Segment Information [Basic Chemicals] YoY +¥8.6 bn (FY20 3Q: -¥1.0 bn ➡ FY21 3Q: ¥7.6 bn)  Income increased year-on-year despite softness in 3Q product markets [USD/ton] Product FY2020 3Q FY2021 3Q Change Price Margin Price Margin Price Margin PX 534 174 890 215 +356 +41 MX 432 72 779 103 +347 +31

  14. Slide 14: Segment Information: Oil E&P and Coal

    Segment Information [Oil E&P] YoY +¥29.7 bn [Coal] YoY +¥22.2 bn (FY20 3Q: ¥5.2bn ➡ FY21 3Q: ¥34.9 bn) (FY20 3Q: -¥0.7bn ➡ FY21 3Q: ¥21.5 bn) <Crude Oil Production Volume and Brent <Coal Production Volume and Australian Coal Crude Oil Price Trends> Spot Price Trends> [Thousand BOE] [USD/bbl] [Thousa

  15. Slide 15: Balance Sheet

    Balance Sheet [¥ billions] 3/31/2021 12/31/2021 Change 3/31/2021 12/31/2021 Change Total Current Cash and Deposits 131.3 89.4 (41.9) Liabilities 1,621.3 1,960.2 338.9 Receivables, Inventory,etc. 1,534.2 2,104.0 569.8 Total Fixed Liabilities 1,118.0 1,167.5 49.4 Total Current Assets 1,665.5 2,193.4 5

  16. Slide 16: Reference Materials

    €& idemitsu mReference Materials # © Idemitsu Kosan Co, Ltd. All Rights Fi 16

  17. Slide 17: Overview of the Company

    Overview of the Company As of the end of March, 2021 ∎ Petroleum Segment ∎ Functional Materials Segment  Refining Capacity 945,000 BD *1) (Lubricants, performance chemicals, electronic  Domestic fuel oil sales volume materials, functional asphalt, agricultural- 34 million KL/year *2) biotechnology

  18. Slide 18: Forecast for FY2021 (Overview)

    Forecast for FY2021（Overview）  Crude Oil / Coal / Exchange Rates [USD/bbl, USD/ton, JPY/USD] 5/11 11/9 Assumptions Change Forecast Forecast (2nd half) Crude Oil (Dubai) 60.0 72.1 12.1 +20.2% 75.0 Crude Oil (Brent)* 61.0 70.4 9.4 +15.5% 78.5 Thermal Coal * 80.0 135.5 55.5 +69.4% 175.0 Exchange Rate

  19. Slide 19: Forecast for FY2021 (Segment Information)

    Forecast for FY2021（Segment Information）  Operating Income + Equity Income [¥ billions] 5/11 11/9 Change Forecast Forecast Petroleum 84.0 233.0 149.0 +177.4% Excluding inventory impact 84.0 93.0 9.0 +10.7% Basic Chemicals 10.0 15.0 5.0 +50.0% Functional Materials 16.0 16.0 － － Power and Renewable E

  20. Slide 20: Financial Data

    Financial Data  Net Sales by Segment [¥ billions] FY2020 3Q FY2021 3Q Change Petroleum 2,509.6 3,604.8 1,095.2 +43.6% Basic Chemicals 222.6 396.3 173.7 +78.1% Functional Materials 251.7 302.7 51.0 +20.3% Power and Renewable Energy 90.2 92.4 2.1 +2.4% Resources* 132.4 246.8 114.4 +86.5% Oil Explorat

  21. Slide 21: Financial Data

    Financial Data  Quarterly segment income（accumulated、excluding inventory impact） [¥ billions] FY2020 1Q FY2020 2Q FY2020 3Q FY2020 FY2021 1Q FY2021 2Q FY2021 3Q Petroleum (9.4) 27.3 64.9 94.7 29.6 45.1 73.7 Equity income (27.2) (28.8) (37.2) (41.1) 6.0 8.6 12.4 Basic Chemicals 0.1 (2.0) (1.0) 3.4 6

  22. Slide 22: Financial Data

    Financial Data  Quarterly segment income（Q on Q, excluding inventory impact） [¥ billions] FY2020 1Q FY2020 2Q FY2020 3Q FY2020 FY2021 1Q FY2021 2Q FY2021 3Q Petroleum (9.4) 36.7 37.6 29.7 29.6 15.4 28.6 Equity income (27.2) (1.6) (8.4) (3.9) 6.0 2.6 3.8 Basic Chemicals 0.1 (2.2) 1.0 4.4 6.7 4.2 (3.

  23. Slide 23: Sales and Production

    Sales and Production  Sales Volume(Petroleum Segment) [Thousand KL,％] FY 2020 3Q FY 2021 3Q Change Gasoline 9,706 9,772 66 0.7% Naphtha 222 175 (47) (21.3%) Jet Fuel 1,044 1,279 235 22.5% Kerosene 2,400 2,063 (338) (14.1%) Diesel Oil 7,429 7,488 58 0.8% Heavy Fuel Oil A 2,298 2,211 (87) (3.8%) Heav

  24. Slide 24: Sales and Production

    Sales and Production  Sales Volume (Basic Chemicals Segment) [Thousand tons,%] FY 2020 3Q FY 2021 3Q Change Basic Chemicals 2,647 2,735 88 3.3%  Sales Volume (Functional Materials Segment) [Thousand KL, Thousand tons,%] FY 2020 3Q FY 2021 3Q Change Lubricants 780 880 100 12.8% Performance Chemical

  25. Slide 25: Sales and Production

    Sales and Production  Oil E&P – Production Volume, including Gas (Resources Segment) [Thousand BOED,%] FY 2020 3Q FY 2021 3Q Change Norway 23.2 25.8 2.6 11.2% Vietnam 0.0 11.7 11.7 － Total('000BOED) 23.2 37.5 14.3 61.6% Total('000BOE) 6,370 10,231 3,861 60.6% *Figures based on interest owned by Ide

  26. Slide 26: Sensitivity

    Sensitivity  Impact on FY earnings Items Range Impact on earnings Petroleum (¥4.0 billion) Crude Fuel cost, etc. ¥1.0 billion １$/bbl Inventory impact (¥5.0 billion) Decrease Oil Oil Exploration & Production (¥1.0 billion) Petroleum (¥2.5 billion) Foreign Exchange Fuel cost, etc. ¥0.5 billion １JPY/$

  27. Slide 27: Crude Oil Prices (Dubai and Brent)

    Crude Oil Prices (Dubai and Brent) [USD/bbl] 90 80 70 60 50 40 30 Brent Dubai 20 10 Apr-17 Apr-18 Apr-19 Apr-20 Apr-21 27

  28. Slide 28: Gasoline – Crude Oil (Domestic spot prices and Spreads)

    Gasoline – Crude Oil (Domestic spot prices and Spreads) [JPY/L] Prices Spreads [JPY/L] 90 20 80 18 16 70 14 60 12 50 10 40 8 30 6 20 Spread 4 10 Crude oil 2 Gasoline 0 0 Apr-17 Apr-18 Apr-19 Apr-20 Apr-21 28

  29. Slide 29: Diesel Oil – Crude Oil (Domestic spot prices and Spreads)

    Diesel Oil – Crude Oil (Domestic spot prices and Spreads) [JPY/L] Prices Spreads [JPY/L] 90 20 80 18 16 70 14 60 12 50 10 40 8 30 6 20 Spread 4 10 Crude oil 2 Diesel oil 0 0 Apr-17 Apr-18 Apr-19 Apr-20 Apr-21 29

  30. Slide 30: Gasoline – Crude Oil (Singapore spot prices and Spreads)

    Gasoline – Crude Oil (Singapore spot prices and Spreads) [USD/bbl] Prices Spreads [USD/bbl] 100 16 90 14 80 12 70 10 60 8 50 6 40 4 30 2 20 Spread Dubai 0 10 Gasoline 0 -2 Apr-17 Apr-18 Apr-19 Apr-20 Apr-21 30

  31. Slide 31: Diesel Oil – Crude Oil (Singapore Spot prices and Spreads)

    Diesel Oil – Crude Oil (Singapore Spot prices and Spreads) [USD/bbl] Prices Spreads [USD/bbl] 100 20 90 18 80 16 70 14 60 12 50 10 40 8 30 6 20 Spread 4 Dubai 10 2 Diesel Oil 0 0 Apr-17 Apr-18 Apr-19 Apr-20 Apr-21 31

  32. Slide 32: Paraxylene, Mixed xylene – Naphtha (Prices and Spreads)

    Paraxylene, Mixed xylene ー Naphtha (Prices and Spreads) [USD/ton] Prices Spreads [USD/ton] 1,400 700 PX spread Mx spread Naptha 1,200 PX MX 600 1,000 500 800 400 600 300 400 200 200 100 0 0 Apr-17 Apr-18 Apr-19 Apr-20 Apr-21 32

  33. Slide 33: Styrene Monomer – Naphtha (Prices and Spreads)

    Styrene Monomer ー Naphtha (Prices and Spreads) [USD/ton] Prices Spreads [USD/ton] 1,600 1,000 900 1,400 800 1,200 700 1,000 600 800 500 400 600 300 400 200 200 100 SM spread Naptha SM 0 0 Apr-17 Apr-18 Apr-19 Apr-20 Apr-21 33

  34. Slide 34: Operational data

    Operational data  Refineries Utilization FY 2021 FY 2017 FY 2018 FY 2019 FY 2020 3Q Idemitsu Kosan 88% 88% 87% 78% 74% Former Showa Shell 88% 93% * Utilization rate based on BCD  Number of Service Stations FY 2021 FY 2017 FY 2018 FY 2019 FY 2020 3Q Idemitsu Kosan 3,545 3,501 3,446 3,426 3,397 Form

  35. Slide 35: Precaution statement about forecasts

    Precaution statement about forecasts Any information about forecasts for the Company’s operating results, management strategy and management policy contained in this documents other than historical facts is prepared, according to judgments made by the top management of the Company based on informati

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