Idemitsu Kosan Co., Ltd. · TSE:5019

Idemitsu Kosan — FY2019 Earnings Presentation

34 slides from Idemitsu Kosan's earnings presentation, May 26, 2020

  1. Slide 1: Presentation on Results for FY2019

    Presentation on Results for FY2019 Idemitsu Kosan Co.,Ltd. May 26, 2020 Copyright©2020 Idemitsu Kosan Co.,Ltd. All Rights Reserved.

  2. Slide 2: Table of Contents

    Table of Contents 1. FY 2019 4th Quarter Topics 2. FY 2019 Results (1) Overview (2) Segment Information ３．FY2020 Forecast 4. Reference Materials 2 Copyright©2020 Idemitsu Kosan Co.,Ltd. All Rights Reserved.

  3. Slide 3: FY 2019 4th Quarter Topics

    FY 2019 4th Quarter Topics Copyright©2020 Idemitsu Kosan Co.,Ltd. All Rights Reserved.

  4. Slide 4: Topics

    Topics １．Impact of decline in crude oil ・Reported negative inventory impact and time lag effects due to a sharp decline in crude oil prices after March. ２．Impact of COVID-19 ・ Demand has slowed down since March, particularly for petroleum products * Year-on-year change in sales volume March: Gasolin

  5. Slide 5: Topics

    Topics ５．COVID-19 Response Measures ・ The COVID-19 Headquarters was established on February 4 with President Shunichi Kito as its leader, creating a framework to prevent virus dissemination as well as to gather information and consider measures to secure stable product supply ・ Petroleum products, w

  6. Slide 6: FY 2019 Results

    FY 2019 Results ・FY 2018(E): Estimate of the total of Idemitsu Kosan and Showa Shell Sekiyu on a 100% consolidated basis ・Segment information: Total of operating income and equity earnings of affiliates (Equity Income) Copyright©2020 Idemitsu Kosan Co.,Ltd. All Rights Reserved.

  7. Slide 7: Crude Oil Price Trends

    Crude Oil Price Trends <Monthly Dubai Crude Oil Price Trends and Assumptions for Performance Forecasts> (USD/Bbl.) FY 2018 Average: US$69.3/Bbl. FY 2019 Average: US$60.3/Bbl. FY 2018 FY 2019 FY 2020 Assumption: US$25.0/Bbl. FY 2020 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 7 Copyright©2020 Ide

  8. Slide 8: JPY/USD Exchange Rate (TTM) Trends

    JPY/USD Exchange Rate (TTM) Trends <Monthly JPY/USD (TTM) Trends and Assumptions for Performance Forecasts> (JPY/USD) FY 2018 Average: 110.8 JPY/USD FY 2019 Average: 108.7 JPY/USD FY 2020 Assumption: 105.0 JPY/USD FY 2018 FY 2019 FY 2020 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 8 Copyright©20

  9. Slide 9: Overview

    Overview <FY 2019 Results> ■ Operating income excluding inventory impact + equity- income decreased by ¥155.3 billion year-on-year, to ¥63.1 billion, mainly due to losses from time lag and decreased equity income in the petroleum segment, reduced product margins in the basic chemicals segment, and r

  10. Slide 10: (1) Overview

    (1) Overview 1) Crude Oil / Exchange Rates (Units: $/Bbl., $/Ton, ¥/$) FY 2018 FY 2019 Change Crude Oil (Dubai) 69.3 60.3 (9.0) (13.0%) Crude Oil (Brent) 71.0 64.3 (6.7) (9.5%) Naphtha Price (Customs) 621 540 (81) (13.0%) Thermal Coal (NEWC) 107.1 77.8 (29.4) (27.4%) Exchange Rate (TTM) 110.8 108.7

  11. Slide 11: (2) Segment Information

    (2) Segment Information 1) Operating Income + Equity Income FY 2018 (E) FY 2019 Change Petroleum 79.8 (109.4) (189.2) － (Excluding inventory impact) 69.0 (20.1) (89.1) － Basic Chemicals 50.4 11.9 (38.5) (76.4%) Functional Materials 33.2 28.4 (4.8) (14.5%) Power and Renewable Energy (7.5) (0.5) 7.0 －

  12. Slide 12: (2) Segment Information

    (2) Segment Information 2) Analysis of Factors Affecting Operating Income + Equity Income (Excluding inventory impact, year-on-year) (Units: ¥ billions) 12 Copyright©2020 Idemitsu Kosan Co.,Ltd. All Rights Reserved.

  13. Slide 13: FY2020 Forecast

    FY2020 Forecast Copyright©2020 Idemitsu Kosan Co.,Ltd. All Rights Reserved.

  14. Slide 14: (1) Impact of COVID-19

    (1) Impact of COVID-19 1) Major Impact on Idemitsu Operations Description ・Reduced demand for fuel due to the request of stay-home and shrinking economic activity -Sales volume forecast (Units: Thousand KL, y-o-y change) Petroleum Gasoline 12,500 -12%, Kerosene 4,200 +7%, Diesel oil 9,700 -8%, Heavy

  15. Slide 15: (2) Overview

    (2) Overview 1) Crude Oil / Exchange Rates (Units: $/Bbl., $/Ton, ¥/$) FY 2019 FY 2020(E) Change Crude Oil (Dubai) 60.3 25.0 (35.3) (58.6%) Crude Oil (Brent) 64.3 30.0 (34.3) (53.4%) Naphtha Price (Customs) 540 300 (240) (44.4%) Thermal Coal (NEWC) 77.8 55.0 (22.8) (29.3%) Exchange Rate (TTM) 108.7

  16. Slide 16: (2) Overview

    (2) Overview 3) Segment Information (Units: ¥ billions) FY 2019 FY 2020(E) Change Petroleum (109.4) 35.0 144.4 － (Excluding inventory impact) (20.1) 35.0 55.1 － Basic Chemicals 11.9 0.0 (11.9) (100.0%) Functional Materials 28.4 0.0 (28.4) (100.0%) Power and Renewable Energy (0.5) (5.0) (4.5) － Resou

  17. Slide 17: Reference Materials

    Reference Materials Copyright©2020 Idemitsu Kosan Co.,Ltd. All Rights Reserved.

  18. Slide 18: Table of Contents

    Table of Contents １. Overview of the Company 5. Market Conditions 2. Financial Reporting 6. Refineries Utilization (1) FY 2019 Results 7. Number of Service 3. Sensitivity Stations 4. Sales and Production (1) Sales/Production Volume 18 Copyright©2020 Idemitsu Kosan Co.,Ltd. All Rights Reserved.

  19. Slide 19: 1. Overview of the Company

    １. Overview of the Company Petroleum Segment Functional Materials Segment Refining capacity: 945,000 BD *1 (Lubricants, performance chemicals, electronic materials, functional asphalt, agricultural- biotechnology, solid electrolyte) Domestic fuel oil sales volume: 42 million KL/year Lubricants sales

  20. Slide 20: 2. Financial Reporting

    2. Financial Reporting (1) FY 2019 Results 1) Net Sales by Segment (Units: ¥ billions) FY 2018 (E) FY 2019 Change Petroleum 5,379.7 4,821.0 (558.7) (10.4%) Basic Chemicals 601.8 459.2 (142.6) (23.7%) Functional Materials 436.3 393.8 (42.4) (9.7%) Power and 137.1 127.7 (9.4) (6.9%) Renewable Energy R

  21. Slide 21: 2. Financial Reporting

    2. Financial Reporting (1) FY 2019 Results 2) Extraordinary Gains/Losses (Units: ¥ billions) FY 2018 (E) FY 2019 Change Gain on Sale of Fixed Assets 5.5 2.2 (3.3) Gain on Sale of Affiliate Stock 2.4 0.0 (2.4) Gain on Business Transfer 2.3 0.0 (2.3) Gain on Stepwise Acquisition 0.0 17.2 17.2 Other 6.

  22. Slide 22: 2. Financial Reporting

    2. Financial Reporting (1) FY 2019 Results 3) Balance Sheet (Units: ¥ billions) 4/1/2019 3/31/2020 Change 4/1/2019 3/31/2020 Change Total Cash and Deposits 141.7 132.2 (9.5) Current Liabilities 1,781.2 1,648.4 (132.8) Receivables, Total Inventory, etc. 1,677.8 1,418.1 (259.7) Fixed Liabilities 1,060

  23. Slide 23: 2. Financial Reporting

    2. Financial Reporting (Units: ¥ billions) (1) FY 2019 Results FY 2019 4) Consolidated CF from Operating Activities (32.7) Statement of Net Income before Tax Adjustments (17.2) Cash Flows Depreciation Expense 94.9 Change in Working Capital 113.9 Other (224.3) CF from Investing Activities (134.5) Pur

  24. Slide 24: 3. Sensitivity

    ３. Sensitivity (1) Impact of a US$1/bbl. Decrease in Crude Oil Prices on FY Earnings (2) Impact of a 1 JPY/USD Appreciation on FY Earnings * In addition to the above, the resources businesses are impacted by fluctuations in exchange rates with other currencies (NOK, AUD, etc.) 24 Copyright©2020 Idem

  25. Slide 25: 4. Sales and Production

    ４. Sales and Production (1)－1.Sales Volume (Petroleum Segment) %） （Units:Thousand KL,%） FY 2018（E） FY 2019 Change Gasoline 15,386 14,119 (1,267) (8.2%) Naphtha 447 265 (182) (40.7%) Jet Fuel 5,261 4,979 (282) (5.4%) Kerosene 4,452 3,940 (512) (11.5%) Diesel Oil 11,380 10,585 (795) (7.0%) Heavy Fuel

  26. Slide 26: 4. Sales and Production

    ４. Sales and Production (1)－2.Sales Volume (Basic Chemicals Segment) %) (Units:Thousand tons, %) FY 2018（E） FY 2019 Change Basic Chemicals 4,289 4,065 (224) (5.2%) (1)－3.Sales Volume (Functional Materials Segment) （ Units:Thousand KL,Thousand tons,% ） FY 2018 （ E） FY 2019 Change Lubricants 1,271 1,1

  27. Slide 27: 4. Sales and Production

    ４. Sales and Production （1）－5.Oil E&P – Production Volume, including Gas (Resources Segment) （ Units:Thousand BOED ） FY 2018 FY 2019 Change Norway 26.8 20.9 (6.0) (22.2%) Total('000BOE) 9,795 7,622 (2,173) (22.2%) *Figures based on interest owned by Idemitsu's resource development subsidiaries （1）－6

  28. Slide 28: 5. Market Conditions

    ５. Market Conditions （1）Crude Oil Prices (Dubai and Brent) （＄／B） 90 80 Dubai 70 Brent 60 50 40 30 Quaterly Average(Dubai) 61.30 49.74 40.71 30.42 43.18 43.17 48.32 53.12 49.77 50.49 59.32 63.88 72.09 74.28 67.42 63.53 67.36 64.49 62.08 50.74 20 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17

  29. Slide 29: 5. Market Conditions (2) Gasoline

    ５. Market Conditions （2）Gasoline – Crude Oil CIF (Prices and Spreads) （￥／KL） （￥／KL） 120,000 40,000 38,000 100,000 36,000 34,000 80,000 32,000 60,000 30,000 28,000 40,000 26,000 24,000 20,000 Spread(RHS) Regular Gasoline-Retail Price,CIF (LHS) 22,000 0 20,000 Apr-15 Oct-15 Apr-16 Oct-16 Apr-17 Oct-17

  30. Slide 30: 5. Market Conditions (3) Diesel Oil

    ５. Market Conditions （3）Diesel Oil – Crude Oil CIF (Prices and Spreads) （￥／KL） （￥／KL） 90,000 Spread(RHS) 20,000 80,000 Diesel Oil-Local(LHS) 70,000 15,000 60,000 10,000 50,000 40,000 5,000 30,000 20,000 0 Apr-15 Oct-15 Apr-16 Oct-16 Apr-17 Oct-17 Apr-18 Oct-18 Apr-19 Oct-19 30 Copyright©2020 Idemits

  31. Slide 31: 5. Market Conditions

    ５. Market Conditions （4）Paraxylene, Mixed xylene, Naptha (Prices and Spreads) （$／t） （$／t） 1,400 700 Paraxylene Spread (RHS) Mixed xylene Spread (RHS) 1,200 Naphtha (LHS) 600 Paraxylene (LHS) Mixed xylene (LHS) 1,000 500 800 400 600 300 400 200 200 100 0 0 Apr-15 Oct-15 Apr-16 Oct-16 Apr-17 Oct-17 Ap

  32. Slide 32: 5. Market Conditions

    ５. Market Conditions （5）Styrene Monomer, Naptha (Prices and Spreads) （$／t） （$／t） 2,000 1,000 1,800 Spread(RHS) 900 Styrene Monomer(LHS) 1,600 800 1,400 700 1,200 600 1,000 500 800 400 600 300 400 200 200 100 0 0 Apr-15 Oct-15 Apr-16 Oct-16 Apr-17 Oct-17 Apr-18 Oct-18 Apr-19 Oct-19 32 Copyright©2020

  33. Slide 33: 6. Refineries Utilization / 7. Number of Service Stations

    ６．Refineries Utilization FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 Idemitsu Kosan 86% 88% 88% 88% 87% Showa Shell 91% 85% 88% 93% * Utilization rate based on BCD ７．Number of Service Stations FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 Idemitsu Kosan 3,666 3,589 3,545 3,501 3,446 Showa Shell 3,193 3,123 3,

  34. Slide 34: 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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