Chubu Electric Power Company,incorporated · TSE:9502

Chubu Electric Power Company,incorporated — FY2017 Earnings Presentation

55 slides from Chubu Electric Power Company,incorporated's earnings presentation, May 2018

1. Slide 1: Investors Meeting for Fiscal Year ended March 31, 2018

   Investors Meeting for Fiscal Year ended March 31, 2018 May, 2018

2. Slide 2: INDEX

   INDEX 01 Outline of Financial Results for Fiscal Year ended March 31, 2018 Summary of Financial Results ･･･････････････01 Electrical Energy Sold ･･･････････････04 Electrical Power Supplied and Principal Figures ･･･････････････05 (Reference) Impact of Accrued Income Incurred by Fuel Cost Adjustment S

3. Slide 3: Outline of Financial Results for Fiscal Year ended March 31, 2018

   01 Outline of Financial Results for Fiscal Year ended March 31, 2018 Note: The Company’s fiscal year (FY) is from April 1 to March 31 of the following year. FY2017 represents the fiscal year begun on April 1, 2017, and ended on March 31, 2018. Copyright © CHUBU Electric Power Co.,Inc. All Right Rese

4. Slide 4: Summary of Financial Results <1>

   01 Summary of Financial Results <1>  Operating revenues (consolidated) increased following FY2014, for the first time in 3 years.  Ordinary income (consolidated) increased following FY2015, for the first time in 2 years.  [Consolidated] We recorded increased sales and profit following FY2014, for

5. Slide 5: Summary of Financial Results <2>

   02 Summary of Financial Results <2> <Consolidated operating revenues>  Operating revenues increased by 249.7 billion yen compared with FY2016, mainly due to an increase in fuel cost adjustment charge, and an increase in surcharge and grant based on Act on Special Measures Concerning Procurement of

6. Slide 6: Summary of Financial Results <3>

   03 Summary of Financial Results <3> <Consolidated ordinary income>  Consolidated ordinary income increased by 7.0 billion yen compared with FY2016, mainly due to improvement of the efficiency and an increase in income of affiliates, in spite of an effect of conversion of income incurred by fuel cos

7. Slide 7: Electrical Energy Sold

   04 Electrical Energy Sold <Electrical Energy Sold> ⁃ Dropped by 0.3% to 121.4TWh, compared with FY2016, mainly due to an effect of switches made to other operators with the intensified competition, in spite of an increase in air conditioning demand by lower temperature in this winter compared with F

8. Slide 8: Electric Power Supplied and Principal Figures

   05 Electric Power Supplied and Principal Figures <Electric Power Supplied>  Hydro : The flow rate fell short of the previous fiscal year; thus hydroelectric power output decreased by 0.1TWh.  Wholesale： Increased by 1.6TWh, mainly due to an increase in wholesale volume.  Purchased Power : Increas

9. Slide 9: Impact of Accrued Income by Fuel Cost Adjustment System (Result)

   06 (Reference) Impact of Accrued Income Incurred by Fuel Cost Adjustment System (Result) Standard fuel price ＜FY2016＞ ＜FY2017＞ income loss 6.0 billion -19.0billion Average Fuel price Fuel procurement price (basis of fuel cost adjustment charge) (basis of fuel cost) 2016/4 2017/4 2018/4 * Accrued inc

10. Slide 10: Summary of Forecast for FY2018 <1>

    07 Summary of Forecast for FY2018 <1> <Forecast>  Consolidated operating revenues will increase mainly due to an increase of fuel cost adjustment charge in spite of a decrease in electrical energy sold.  Consolidated ordinary income will increase mainly due to further management efficiency in spit

11. Slide 11: Summary of Forecast for FY2018 <2>

    08 Summary of Forecast for FY2018 <2> [Principal Figures] (TWh,%) FY2018 FY2017 Change (Electrical energy sold) (Forecast)(A) (Result)(B) (A-B) (A-B)/B Low voltage 36.0 38.8 (2.8) (7.2) High voltage ・Extra-high voltage 81.3 82.6 (1.3) (1.6) Total 117.3 121.4 (4.1) (3.4) [Reference] Electrical energy

12. Slide 12: Impact of Accrued Income by Fuel Cost Adjustment System in FY2018 (Forecast)

    (Reference) 09 Impact of Accrued Income Incurred by Fuel Cost Adjustment System in FY2018 (Forecast) Standard fuel price 基準燃料価格 ＜FY2017＞ ＜FY2018＞ loss loss -19.0billion -15.0billion Fuel procurement price (basis of fuel cost) Average Fuel price (basis of fuel cost adjustment charge) * Accrued income

13. Slide 13: Policy of Return to Shareholders and Dividends

    Policy of Return to Shareholders and Dividends for the Fiscal Year under Review, 10 and the Fiscal Year to Come <Policy of Return to Shareholders>  The Company will work to maintain stable dividends after taking account of financial condition and other factors, while continuously investing in build

14. Slide 14: Management Situation

    02 Management Situation Copyright © CHUBU Electric Power Co.,Inc. All Right Reserved.

15. Slide 15: Initiatives to Address Management Challenges and Toward Realization of Our Vision

    Initiatives to Address Management Challenges and 11 Toward Realization of Our “Vision” Changing social structure Changing business systems Intensifying competition among business Shrinking energy market “Initiatives to Address Management Challenges” (four priority measures) operators Diversifying cu

16. Slide 16: Transition to a Business Model with Unbundling of Each Sector

    12 Transition to a Business Model with Unbundling of Each Sector  With the changes in the system, including full liberalization of the electricity retail market and the legal unbundling of the power transmission/distribution division, that made power generation, power transmission/distribution, and

17. Slide 17: Improving Safety Further at Hamaoka Nuclear Power Plant

    Improving Safety Further at Hamaoka Nuclear Power Plant Safety improvement measures for Hamaoka Nuclear Power Plant (prevent 13 accidents and prepare for their occurrence)  Under a strong determination to “not allow another accident like that at the Fukushima Daiichi Nuclear Power Plant,” the Hamao

18. Slide 18: Aiming for a power plant that is safer and more trusted

    Improving Safety Further at Hamaoka Nuclear Power Plant 14 Aiming for a power plant that is safer and more trusted  In order for the business operator itself to squarely reconsider the safety of nuclear power and make efforts to continuously improve safety in the wake of the Fukushima Daiichi accid

19. Slide 19: Stable Power Supply for a New Age: Renewable Energy and Power Network

    Stable Power Supply for a New Age Responding to the introduction/expansion of renewable energy 15 (upgrading the power network)  In response to output fluctuations in renewable energy (distributed energy resources), we will improve the accuracy of output prediction and conduct optimal operation of

20. Slide 20: Improve management efficiency to strengthen business base <1>

    Strengthening Our Business Base for Growth and Achieving Sustainable Growth 16 Improve management efficiency to strengthen business base <1>  Aiming to strengthen our business base through improved management efficiency, we will continually work at reducing repair costs and will streamline equipmen

21. Slide 21: Improve management efficiency to strengthen business base <2>

    Strengthening Our Business Base for Growth and Achieving Sustainable Growth 17 Improve management efficiency to strengthen business base <2> [Specific initiative example: improving thermal efficiency of LNG combined cycle generation plants] We are working on cutting fuel costs by improving the effic

22. Slide 22: Improve management efficiency to strengthen business base <3>

    Strengthening Our Business Base for Growth and Achieving Sustainable Growth 18 Improve management efficiency to strengthen business base <3> [Specific initiative example: improving thermal efficiency of LNG combined cycle generation plants] Based on past hazard results and process of failure develop

23. Slide 23: Accelerate growth after completion of value chain in JERA

    Strengthening Our Business Base for Growth and Achieving Sustainable Growth 19 Accelerate growth after completion of value chain in JERA  We will complete a whole value chain from upstream investments and fuel procurement through power generation to power and gas wholesale sales by integrating our

24. Slide 24: Provide energy services that continue to be chosen by customers

    Strengthening Our Business Base for Growth and Achieving Sustainable Growth 20 Provide energy services that continue to be chosen by customers  In order to continue to be chosen by customers in a liberalized retailing market, we will deliver new services that meet customers needs using IoT, etc., n

25. Slide 25: Establish new growth fields (provide new forms of community)

    Strengthening Our Business Base for Growth and Achieving Sustainable Growth 21 Establish new growth fields (provide new forms of community)  The Chubu Electric Power Group has contributed to regional development through the energy business. In order to help resolve social issues faced by communitie

26. Slide 26: Carrying out ESG management (E)

    Establishing a Business Structure/Management Base that can Respond Instantly to Environmental Changes 22 Carrying out ESG management (E)  We carry out business activities with awareness of ESG (environment, society, and governance), in order to fulfil our corporate social responsibility (CSR), incr

27. Slide 27: Carrying out ESG management (S・G)

    Establishing a Business Structure/Management Base that can Respond Instantly to Environmental Changes 23 Carrying out ESG management (S・G) （Social） （Governance） So that employees will work with vitality, we will promote Aiming for sustainable growth, we will strive to further work-life balance, base

28. Slide 28: Reference Data (1): Financial Contents

    03 Reference Data (1) : Financial Contents Copyright © CHUBU Electric Power Co.,Inc. All Right Reserved.

29. Slide 29: Consolidated Statements of Income

    24 Consolidated Statements of Income (Rounded down to nearest 100 million yen.) (Billion yen,%) FY2017 FY2016 Change (A) (B) (A-B) (A-B)/B Operating revenues 2,853.3 2,603.5 249.7 9.6 Non-operating revenues 27.8 18.4 9.4 51.2 Ordinary revenues 2,881.2 2,621.9 259.2 9.9 Operating expenses 2,716.8 2,4

30. Slide 30: Non-consolidated Statements of Income <1>: Operating revenues

    25 Non-consolidated Statements of Income <1>: Operating revenues (Rounded down to nearest 100 million yen.) (Billion yen,%) FY2017 FY2016 Change 【Major factors for change】 (A) (B) (A-B) (A-B)/B ⁃ An increase in fuel cost Electricity sales revenues 2,145.3 2,027.6 117.6 5.8 adjustment charge : +118.4

31. Slide 31: Non-consolidated Statements of Income <2>: Operating expenses

    26 Non-consolidated Statements of Income <2>: Operating expenses (Rounded down to nearest 100 million yen.) (Billion yen,%) FY2017 FY2016 Change 【Major factors for change】 (A) (B) (A-B) (A-B)/B ⁃ Operational deterioration of pension assets Salaries and employee benefits 181.0 176.2 4.8 2.8 ⁃ Differe

32. Slide 32: Non-consolidated Statements of Income <3>: Net income

    27 Non-consolidated Statements of Income <3>: Net income (Rounded down to nearest 100 million yen.) (Billion yen,%) FY2017 FY2016 Change 【Major factors for change】 (A) (B) (A-B) (A-B)/B Operating income 114.7 117.2 (2.5) (2.2) ⁃ Electricity business : +1.3 (111.8 → 113.1) Non-operating revenues 10.8

33. Slide 33: Consolidated and Non-consolidated Financial Standing

    28 Consolidated and Non-consolidated Financial Standing (Rounded down to nearest 100 million yen.) (Billion yen) 2018.3 2017.3 Change (A) (B) (A-B) Consolidated 5,530.1 5,412.3 117.8 Assets Non-consolidated 5,001.2 4,956.5 44.6 Consolidated 3,738.2 3,687.5 50.6 Liabilities Non-consolidated 3,556.1 3

34. Slide 34: Segment Information

    29 Segment Information [Operating revenues] (Rounded down to nearest 100 million yen.) (Billion yen) FY2017 FY2016 Change (A) external customers (B) external customers (A-B) external customers Power Generation 1,097.6 47.5 986.2 29.4 111.3 18.0 Power Network 744.6 85.7 732.9 50.7 11.7 35.0 Customer

35. Slide 35: Consolidated Statements of Cash Flows

    30 Consolidated Statements of Cash Flows (Rounded down to nearest 100 million yen.) (Billion yen) FY2017 FY2016 Change (A) (B) (A-B) Cash flows from operating activities (a) 424.1 335.0 89.0 Cash flows from investing activities (b) (344.4) (360.2) 15.7 Cash flows from financing activities (c) (88.6)

36. Slide 36: Impact of the Feed-in-Tariff Scheme for Renewable Energy

    31 Impact of the Feed-in-Tariff Scheme for Renewable Energy <Result of FY2017 (change from the previous year in parenthesis)> Renewable energy Electricity generator Electric customers utility Purchased cost (Purchased power Surcharge under act on purchase of from other suppliers) renewable energy so

37. Slide 37: Ordinary Income(Loss) and Net Income(Loss)

    32 Ordinary Income(Loss) and Net Income(Loss) [Ordinary Income(Loss)] [Net Income(Loss)] (billion yen) (billion yen) 300.0 300.0 Non-Consolidated Consolidated Non-consolidated Consolidated 250.0 250.0 100.0 billion yen (Consolidated) 85.0 billion yen 200.0 135.0 billion yen 200.0 (Non-Consolidated)

38. Slide 38: Cash Flow (Consolidated)

    33 Cash Flow (Consolidated) （billion yen） 800.0 Cash Flows from Operating Activities Cash Flows from Investing Activities FCF 600.0 562.4 539.1 449.7 476.8 424.1 400.0 335.0 296.7 320.0 254.4 227.6 203.7 194.0 200.0 176.8 113.6 79.6 0.0 (25.1) (70.2) (62.8) (102.9) (100.0) (200.0) (242.3) (247.0) (2

39. Slide 39: Fund Raising and Outstanding Interest-bearing Debt

    34 Fund Raising and Outstanding Interest-bearing Debt  We raised total approx. 1,500.0 billion yen in long-term funding for 3 years since the shutdown of Hamaoka Nuclear Power Station.  We forecast to raise approx. 70.0 billion yen in long-term funding in FY2018.  We forecast outstanding Interest

40. Slide 40: Financial Ratio, Credit Ratings

    35 Financial Ratio, Credit Ratings [Shareholders’ equity ratio] [Debt-Equity ratio] Approx. 33% (%) (Times) 35.0 as of Apr. 2019* Non-consolidated Consolidated (Consolidated) Non-Consolidated Consolidated Approx. 1.7 times at the end of FY2018 Approx. 31% 2.5 (Consolidated) as of Apr. 2019* (Non-Con

41. Slide 41: ROA and ROE

    36 ROA and ROE （%） [ROA] （%） [ROE] 6.0 16.0 Non-Consolidated Consolidated Non-Consolidated Consolidated 14.0 5.0 12.0 Approx. 3% 4.0 (Non-Consolidated, Consolidated) 10.0 Approx. 6% 8.0 (Non-Consolidated, Consolidated 3.0 6.0 2.0 4.0 1.0 2.0 0.0 0.0 (2.0) (1.0) (4.0) (2.0) (6.0) (3.0) (8.0) 2009 201

42. Slide 42: Sales Figures

    37 Sales Figures FY2017 Target The number of applications ; Chubu region 1.41 million ― New electric tariff menu Electrical energy sold in the Tokyo Increase to 30.0 billion kWh/year 5.2 billion kWh Outside of metropolitan area (second half of 2020s) Chubu region The number of applications ; Acquire

43. Slide 43: Reference Data (2): Management Information

    03 Reference Data (2) : Management Information Copyright © CHUBU Electric Power Co.,Inc. All Right Reserved.

44. Slide 44: Responding to renewable energy expansion (reuse storage batteries for EVs)

    Stable Power Supply for a New Age Responding to the introduction/expansion of renewable energy 38 (reuse storage batteries for EVs)  In cooperation with Toyota Motor Corporation, we will start new verification aimed at establishing a high- capacity storage battery system that reuses storage batteri

45. Slide 45: Initiatives of JERA <1>

    Strengthening Our Business Base for Growth and Achieving Sustainable Growth 39 Initiatives of JERA <1> [Domestic power generation business (New establishment and replacement)] Bring together the knowledge and technology of both companies to establish and replace thermal power stations, and thereby s

46. Slide 46: Initiatives of JERA <2>

    Strengthening Our Business Base for Growth and Achieving Sustainable Growth 40 Initiatives of JERA<2> 【Fuel business (upstream, procurement, transportation, trading)】 Optimum portfolio is create using the world’s largest procurement scale and trading, and fuel procurement that can flexibly respond t

47. Slide 47: Provide energy services chosen by customers (Tokyo metropolitan area)

    Strengthening Our Business Base for Growth and Achieving Sustainable Growth Provide energy services that continue to be chosen by customers (expand 41 business in the Tokyo metropolitan area)  We will jointly establish a new company with Osaka Gas to conduct sales of services related to electric po

48. Slide 48: Establish new growth fields (provide new forms of community)

    Strengthening Our Business Base for Growth and Achieving Sustainable Growth 42 Establish new growth fields (provide new forms of community) Services to improve the quality of life of Provide various “new forms of community” individuals by utilizing various data • For new community development in urb

49. Slide 49: Carrying out ESG management (E: Composition of Electric Power Output)

    Establishing a Business Structure/Management Base that can Respond Instantly to Environmental Changes 43 Carrying out ESG management (E : Composition of Electric Power Output)  Based on energy mix of Japan, aim for optimum composition of power sources by combining various types of power source, suc

50. Slide 50: Carrying out ESG management (E: Reduction of CO2 emissions)

    Establishing a Business Structure/Management Base that can Respond Instantly to Environmental Changes 44 Carrying out ESG management (E : Reduction of CO2 emissions)  Japanese government set up the target of reducing greenhouse gas emissions (26% reduced by FY2030) as Japan’s goal of the Paris Agre

51. Slide 51: Carrying out ESG management (E: Improvement of thermal efficiency)

    Establishing a Business Structure/Management Base that can Respond Instantly to Environmental Changes 45 Carrying out ESG management (E : Improvement of thermal efficiency) 50.0 (%) [Change of total thermal efficiency (LHV basis)] [Outline of development of Taketoyo Chubu 10 EPCos Total 48.94 Therma

52. Slide 52: Carrying out ESG management (E: Promotion of Renewable Energy)

    Establishing a Business Structure/Management Base that can Respond Instantly to Environmental Changes 46 Carrying out ESG management (E : Promotion of Renewable Energy) (As of the end of March, 2018) Development locations of hydroelectric power station (Reference) Chubu Electric Conventional hydro C

53. Slide 53: Carrying out ESG management (E: connect & manage)

    Establishing a Business Structure/Management Base that can Respond Instantly to Environmental Changes 47 Carrying out ESG management (E : connect & manage)  Chubu Electric Power has begun an initiative (N-1 power control) to use capacity that is set aside for an emergency in case of failure, based

54. Slide 54: DISCLAIMER

    DISCLAIMER This presentation contains assumptions and forward-looking statements with respect to the financial conditions, and forecasts of the company, which are based on information currently available. These assumptions involve certain risks and uncertainties, and may cause actual results materia

55. Slide 55: Copyright © CHUBU Electric Power Co.,Inc. All Right Reserved.

    Copyright © CHUBU Electric Power Co.,Inc. All Right Reserved.

Chubu Electric Power — FY2017 Earnings Presentation on 6ix