Slide 1: Presentation on Results for FY2020
Presentation on Results for FY2020 May 11, 2021 Idemitsu Kosan Co.,Ltd.
Slide 2: Summary of Financial Results
Summary of Financial Results FY2020 Financial overview Operating + equity income (“segment income”) turned positive in FY20, mainly as inventory impact improved following an increase in crude oil prices Segment income excluding inventory impact increased by ¥29.7 billion year- on-year, support
Slide 3: Summary of FY2021 Forecast
Summary of FY2021 Forecast FY2021 Forecast overview Forecast a ¥39.7 billion year-on-year increase in segment income, with a recovery in resource prices and reversal of one-time losses in the power & renewable energy segment in FY20 Anticipating a ¥50.1 billion year-on-year increase in net inc
Slide 4: Key Topics (FY2020)
Key Topics（FY2020） Impact of COVID 19 Pandemic Decreased fuel demand as well as squeezed petrochemical margin throughout the year Status of Nghi Son Refinery in Vietnam Under continuous stable operation No change in equity loss from the previous forecast Recorded 18.1 billion valuation l
Slide 5: Operating Environment
Operating Environment Dubai Crude Oil Australian Coal Exchange Rate Price [USD/ton] Spot price [JPY/USD] (USD) [USD/bbl] 80.0 120.0 112.0 111.0 70.0 110.0 109.9 67.4 110.0 60.0 100.0 95.8 61.2 62.1 60.0 108.8 108.9 109.0 50.0 90.0 50.7 80.2 108.0 40.0 44.6 80.0 42.9 107.0 107.6 107.3 65.4 67.3 30.0
Slide 6: Overview
Overview Crude Oil / Coal / Exchange Rates [USD/bbl, USD/ton, JPY/USD] FY2019 FY2020 Change Crude Oil (Dubai) 60.3 44.5 (15.8) (26.2%) Crude Oil (Brent)* 64.3 41.7 (22.6) (35.2%) Thermal Coal * 77.8 60.4 (17.4) (22.3%) Exchange Rate (TTM) 108.7 106.1 (2.6) (2.4%) *Brent prices and thermal coal pri
Slide 7: Segment Information
Segment Information Operating Income + Equity Income [￥billions] FY2019 FY2020 Change Petroleum (109.4) 102.1 211.5 － Excluding inventory impact (20.1) 94.7 114.7 － Basic Chemicals 11.9 3.4 (8.5) (71.5%) Functional Materials 28.4 13.0 (15.4) (54.3%) Power and Renewable Energy (0.5) (17.3) (16.8) －
Slide 8: Segment Information
Segment Information Factors Affecting Operating Income + Equity Income (excluding inventory impact, year on year) [￥billions] Cost Synergies, Oil Exploration Coal etc. Fuel cost, and Production (26.0) etc. (11.0) Volume Volume Margin FX (time lag) Margin etc. Lubricants etc. FX etc. Cost etc. Pric
Slide 9: Segment Information
Segment Information [Petroleum] YoY ＋¥114.7 bn (FY2019：-¥20.1bn ➡ FY2021：¥94.7 bn) <Year-on-year Change in Petroleum <Trends in Domestic Petroleum Product Margins*> sales volume (4 Core Products)> *Average of gasoline, diesel oil, kerosene, and heavy oil A margins (domestic spot –crude oil) (YoY) [￥
Slide 10: Segment Information
Segment Information [Basic Chemicals]YoY-¥8.5 bn (FY2019：¥11.9 bn ➡ FY2020：¥3.4 bn) Decrease in profits mainly due to weaker margins [USD/ton] Product FY2019 FY2020 Change Price Margin Price Margin Price Margin PX 807 303 592 183 (215) (120) MX 672 169 491 82 (181) (87) SM 936 433 827 418 (109) (1
Slide 11: Segment Information
Segment Information [Oil E&P] YoY -¥11.0 bn [Coal] YoY -¥26.0 bn (FY19：¥17.8bn ➡ FY20：¥6.8 bn) (FY19：¥24.0 bn ➡ FY20：-¥2.0 bn) <Crude Oil Production Volume and Brent <Coal Production Volume and Australian Coal Crude Oil Price Trends> Spot Price Trends> [Thousand BOE] [USD/bbl] [Thousand tons] [USD/t
Slide 12: Balance Sheet
Balance Sheet [¥ billions] 3/31/2020 3/31/2021 Change 3/31/2020 3/31/2021 Change Total Current Cash and Deposits 132.2 131.3 (0.9) Liabilities 1,648.4 1,621.3 (27.1) Receivables, Inventory,etc. 1,418.1 1,534.2 116.1 Total Fixed Liabilities 1,038.0 1,118.0 80.1 Total Current Assets 1,550.3 1,665.5 11
Slide 13: Statement of Cash Flows
Statement of Cash Flows [¥ billions] Cash Flow from Operating Activities 170.5 Net Income before tax 64.6 Depreciation Expense 98.2 Change in Working Capital (38.7) Other 46.4 Cash Flow from Investing Activities (109.9) Purchase of tangible fixed assets (121.1) Other 11.2 Cash Flow from Financing Ac
Slide 14: Key ESG Topics in FY20
Key ESG Topics in FY20 E (Environment) ■ MSCI rating upgraded from A to AA (September 2020) ■ CDP rating upgraded from B to A- (December 2020) ■ Announced 1st year (FY19) results of CO2 reduction based on the med-term plan-1.30 million t-CO2 (vs. FY17) * Reduction efforts: -0.19 million t-CO2 / othe
Slide 15: Key Topics (FY2021)
Key Topics（FY2021） Impact of COVID 19 Pandemic on Idemitsu’s Operations While we expect recovery in demand for the 4 core products and jet fuel, careful observation of demand trends is warranted in light of the recent increase in infected persons [％] FY2021 1H FY2021 2H FY2021 FY2020 Forecast Fo
Slide 16: Overview
Overview Crude Oil / Coal / Exchange Rates [USD/bbl, USD/ton, JPY/USD] FY2020 FY2021 Change Crude Oil (Dubai) 44.5 60.0 15.5 34.8% Crude Oil (Brent)* 41.7 61.0 19.3 46.4% Thermal Coal * 60.4 80.0 19.6 32.5% Exchange Rate (TTM) 106.1 105.0 (1.1) (1.0%) *Brent prices and thermal coal prices are aver
Slide 17: Segment Information
Segment Information Operating Income + Equity Income [￥billions] FY2020 FY2021 Change Petroleum 102.1 84.0 (18.1) (17.7%) Excluding inventory impact 94.7 84.0 (10.7) (11.3%) Basic Chemicals 3.4 10.0 6.6 193.9% Functional Materials 13.0 16.0 3.0 23.1% Power and Renewable Energy (17.3) (6.0) 11.3 －
Slide 18: Segment Information
Segment Information Factors Affecting Operating Income + Equity Income (excluding inventory impact, year on year) [￥billions] Oil Exploration Coal and Production +9.0 +26.2 Pricing Pricing Volume Volume FX etc. FX Cost etc. Volume Lubricants Margin etc. Volume Margin Cost etc. Fuel Cost etc. Petro
Slide 19: Segment Information
Segment Information [Petroleum] YoY-¥10.7 bn (FY2020：¥94.7 bn ➡ FY2021：84.0 bn) Forecasting demand recovery from COVID for 4 core products Refining margins expected decrease due to reversal of time lags in the previous FY Overall profit decrease from refinery fuel costs, SDM, etc. despite inte
Slide 20: Segment Information
Segment Information [Power and Renewable Energy] YoY＋¥11.3 bn (FY2020：-¥17.3bn ➡FY2021：-¥6.0 bn) Anticipating year-on-year growth in the power business, reflecting recovery from the impact of the soaring JEPX market in FY20 4Q [Oil Exploration and Production] YoY＋¥26.2 bn (FY2020：¥6.8 ➡ FY2021：¥33
Slide 21: Investments
Investments [¥ billions] FY2020 FY2021 Maintenance Maintenance Strategic Total Strategic Total Renewal Renewal Petroleum Basic Chemicals 10 44 54 9 82 91 Power/Renewable Functional 21 21 42 28 19 47 Materials ,Others Resources 39 15 54 38 17 55 Total 70 80 150 75 118 193 Depreciation Expense （includ
Slide 22: Balance Sheet/Cash Flows (FY2021 Forecast)
Balance Sheet/Cash Flows（FY2021 Forecast) [¥ billions] [¥ billions] 3/31/2022 3/31/2022 Cash Flow from Operating Activities 250 Net income 85 Depreciation Expense 125 Current Assets 1,640 Liabilities 2,740 Other 40 Cash Flow from Investing Activities (215) Fixed Strategic (75) Assets 2,360 Net Asset
Slide 23: Reference Materials
€& idemitsu Reference Materials # © Idemitsu Kosan Co, Ltd. All Rights Fi
Slide 24: Overview of the Company
Overview of the Company ∎ 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, solid electrolyte) Number
Slide 25: Financial Data
Financial Data Net Sales by Segment [¥ billions] FY2019 FY2020 Change Petroleum 4,821.0 3,593.4 (1,227.6) (25.5%) Basic Chemicals 459.2 329.0 (130.2) (28.3%) Functional Materials 393.8 332.6 (61.2) (15.6%) Power and Renewable Energy 127.7 123.7 (4.0) (3.1%) Resources* 241.8 172.0 (69.8) (28.9%) Oi
Slide 26: Financial Data
Financial Data Quarterly segment income（accumulated, excluding inventory impact） [¥ billions] FY2019 1Q FY2019 2Q FY2019 3Q FY2019 FY2020 1Q FY2020 2Q FY2020 3Q FY2020 Petroleum 3.5 15.4 26.1 (20.1) (9.4) 27.3 64.9 94.7 Equity income (2.7) (14.9) (26.0) (32.7) (27.2) (28.8) (37.2) (41.1) Basic Che
Slide 27: Sales and Production
Sales and Production Sales Volume(Petroleum Segment) [Thousand KL,％] FY 2019 FY 2020 Change Gasoline 14,119 12,764 (1,355) (9.6%) Naphtha 265 305 40 15.0% Jet Fuel 2,531 1,372 (1,159) (45.8%) Kerosene 3,940 4,287 347 8.8% Diesel Oil 10,585 9,872 (713) (6.7%) Heavy Fuel Oil A 3,335 3,316 (19) (0.6%
Slide 28: Sales and Production
Sales and Production Sales Volume (Basic Chemicals Segment) [Thousand tons,%] FY 2019 FY 2020 Change Basic Chemicals 4,065 3,607 (458) (11.3%) Sales Volume (Functional Materials Segment) [Thousand KL, Thousand tons,%] FY 2019 FY 2020 Change Lubricants 1,192 1,089 (103) (8.7%) Performance Chemica
Slide 29: Sales and Production
Sales and Production Oil E&P – Production Volume, including Gas (Resources Segment) [Thousand BOED,%] FY 2019 FY 2020 Change Norway 20.9 23.1 2.2 10.5% Vietnam 0.0 0.9 0.9 － Total('000BOED) 20.9 24.0 3.1 14.7% Total('000BOE) 7,622 8,785 1,163 15.3% *Figures based on interest owned by Idemitsu's re
Slide 30: Sales and Production - Forecast
Sales and Production ‐ Forecast Sales Volume(Petroleum Segment) [Thousand KL,％] FY 2020 FY2021 Change Gasoline 12,764 13,230 466 3.6% Naphtha 305 100 (205) (67.2%) Jet Fuel 1,372 1,990 618 45.0% Kerosene 4,287 4,050 (237) (5.5%) Diesel Oil 9,872 10,210 338 3.4% Heavy Fuel Oil A 3,316 3,250 (66) (2
Slide 31: Sales and Production - Forecast
Sales and Production ‐ Forecast Sales Volume (Basic Chemicals Segment) [Thousand tons,%] FY 2020 FY2021 Change Basic Chemicals 3,607 4,090 483 13.4% Sales Volume (Functional Materials Segment) [Thousand KL, Thousand tons,%] FY 2020 FY2021 Change Lubricants 1,089 1,240 151 13.9% Performance Chemi
Slide 32: Sales and Production - Forecast
Sales and Production ‐ Forecast Oil E&P Production Volume, including Gas (Resources Segment) [Thousand BOED,%] FY 2020 FY2021 Change Norway 23.1 25.1 2.0 8.4% Vietnam 0.9 14.5 13.6 1,563.2% Total('000BOED) 24.0 39.5 15.6 64.9% Total('000BOE) 8,785 14,430 5,645 64.2% *Figures based on interest owne
Slide 33: Sensitivity
Sensitivity Impact on FY earnings Items Range Impact on earnings Petroleum (¥4.0 billion) Crude Fuel cost, etc. ¥1.0 billion １$/bbl Inventory impact (¥5.0 billion) Decrease Oil Oil Exploration & Production (¥1.0 billion) Petroleum (¥2.5 billion) Foreign Exchange Fuel cost, etc. ¥0.5 billion １JPY/$
Slide 34: Crude Oil Prices (Dubai and Brent)
Crude Oil Prices (Dubai and Brent) [USD/bbl] 90 Brent Dubai 80 70 60 50 40 30 20 10 Apr-16 Apr-17 Apr-18 Apr-19 Apr-20 34
Slide 35: Gasoline – Crude Oil (Domestic spot prices and Spreads)
Gasoline – Crude Oil (Domestic spot prices and Spreads) [JPY/L] Prices Spreads [JPY/L] 80 18 70 16 14 60 12 50 10 40 8 30 6 20 4 Spread 10 Crude oil 2 Gasoline 0 0 Apr-16 Apr-17 Apr-18 Apr-19 Apr-20 35
Slide 36: Diesel Oil – Crude Oil (Domestic spot prices and Spreads)
Diesel Oil – Crude Oil (Domestic spot prices and Spreads) [JPY/L] Prices Spreads [JPY/L] 80 20 18 70 16 60 14 50 12 40 10 8 30 6 20 Spread 4 10 Crude oil 2 Diesel oil 0 0 Apr-16 Apr-17 Apr-18 Apr-19 Apr-20 36
Slide 37: 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-16 Apr-17 Apr-18 Apr-19 Apr-20 37
Slide 38: 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-16 Apr-17 Apr-18 Apr-19 Apr-20 38
Slide 39: 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 PX 1,200 MX 600 1,000 500 800 400 600 300 400 200 200 100 0 0 Apr-16 Apr-17 Apr-18 Apr-19 Apr-20 39
Slide 40: Styrene Monomer – Naphtha (Prices and Spreads)
Styrene Monomer ー Naphtha (Prices and Spreads) [USD/ton] Prices Spreads [USD/ton] 1,600 1,200 1,400 1,000 1,200 800 1,000 800 600 600 400 400 200 200 SM spread Naptha SM 0 0 Apr-16 Apr-17 Apr-18 Apr-19 Apr-20 40
Slide 41: Operational data
Operational data Refineries Utilization FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 Idemitsu Kosan 88% 88% 88% 87% 78% Former Showa Shell 85% 88% 93% * Utilization rate based on BCD Number of Service Stations FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 Idemitsu Kosan 3,589 3,545 3,501 3,446 3,426 Former
Slide 42: 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