Slide 1: Presentation on Results for FY 2017
Presentation on Results for FY 2017 Idemitsu Kosan Co.,Ltd. May 15, 2018
Slide 2: Table of Contents
Table of Contents 1. FY 2017 Financials (1) Overview (2) Segment Information 2. Forecast for FY 2018 Performance (1) Overview (2) Segment Information (3) Investments (4) Dividend Policy 3. Reference Materials Copyright©2018 Idemitsu Kosan Co.,Ltd. All Rights Reserved. 1
Slide 3: Crude Oil Price Trends
Crude Oil Price Trends <Monthly Dubai Crude Oil Price Trends and Assumptions for Performance Forecasts> (USD/Bbl.) FY 2018 Assumption: US$65/Bbl. FY 2017 Average: US$55.9/Bbl. FY 2016 Actual FY 2016 Average: US$46.9/Bbl. FY 2017 Actual FY 2018 Assumption Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb M
Slide 4: JPY/USD Exchange Rate (TTS) Trends
JPY/USD Exchange Rate (TTS) Trends <Monthly JPY/USD (TTS) Trends and Assumptions for Performance Forecasts> (JPY/USD) FY 2018 Assumption: 110 JPY/USD FY 2017 Average: 111.9 JPY/USD FY 2016 Average: 109.4 JPY/USD FY 2016 Actual FY 2017 Actual FY 2018 Assumption Apr May Jun Jul Aug Sep Oct Nov Dec Jan
Slide 5: Overview
Overview <FY2017 Financials> ■ Operating income increased by ¥66.1 billion year-on-year, to ¥201.3 billion, mainly due to stronger crude oil and coal markets and improved petroleum product margins ■ Ordinary income increased by ¥86.3 billion year-on-year, to ¥226.3 billion. Extraordinary loss record
Slide 6: 1. FY 2017 Financials
1. FY 2017 Financials
Slide 7: (1) Overview
(1) Overview 1) Crude Oil / Exchange Rates (Units: $/Bbl., $/Ton, ¥/$) FY2016 FY2017 Change Crude Oil (DB FOB) 46.9 55.9 8.9 19.0% Crude Oil (Brent) 43.7 54.3 10.6 24.2% Naphtha Price (Customs) 438 520 82 18.8% Thermal Coal (NEWC) 66.0 88.9 23 34.7% Exchange Rate (TTS) 109.4 111.9 2.5 2.2% * Brent p
Slide 8: (2) Segment Information
(2) Segment Information 1) Operating Income (Units: ¥ billions) FY2016 FY2017 Change Petroleum Products 77.0 88.6 11.6 15.1% (Excluding inventory impact) 46.0 57.5 11.5 25.0% Petrochemical Products 40.0 42.2 2.3 5.7% Resources 16.6 66.8 50.2 302.3% Oil Exploration and Production 8.5 27.2 18.7 220.6%
Slide 9: (2) Segment Information
(2) Segment Information 2) Analysis of Factors Affecting Operating Profits (Year-on-year) (Units: ¥ billions) Others/ Price- Reconcili- related ation Increased Factors, Product Exploration etc. Margins, Costs, etc. Operating Costs, Increase in Sales Foreign Sales Volume/ Exchange Volume/ Mfg. Fuel P
Slide 10: 2. Forecast for FY 2018 Performance
2. Forecast for FY 2018 Performance
Slide 11: (1) Overview
(1) Overview 1) Crude Oil / Exchange Rates (Units: $/Bbl., $/Ton, ¥/$) FY2017 Actual FY2018 Forecast Difference Crude Oil (DB FOB) 55.9 65.0 9.1 16.4% Crude Oil (Brent) 54.3 67.5 13.2 24.4% Naphtha Price (Customs) 520 602 82 15.8% Thermal Coal (NEWC) 88.9 88.0 (0.9) (1.0%) Exchange Rate (TTS) 111.9
Slide 12: (2) Segment Information
(2) Segment Information 1) Operating Income (Units: ¥ billions) FY2017 Actual FY2018 Forecast Difference Petroleum Products 88.6 56.0 (32.6) (36.8%) (Excluding inventory impact) 57.5 56.0 (1.5) (2.6%) Petrochemical Products 42.2 34.0 (8.2) (19.5%) Resources 66.8 60.0 (6.8) (10.2%) Oil Exploration an
Slide 13: (2) Segment Information
(2) Segment Information 2) Analysis of Factors Affecting Operating Profits (Year-on-year) (Units: ¥ billions) Synergies/ Decrease in Supply Costs, etc. Sales Volume/ Others/ Price- Decrease Reconcili- related in Product ation Margins, Inventory etc. Impact Decrease in Operating Product Costs, Sales
Slide 14: (3) Investments
(3) Investments (Units: ¥ billions) FY2016 FY2017 FY2018 Change Change Actual Actual Plan (vs. FY2017) Strategic 39.0 26.2 (12.8) 89.0 62.8 Maintenance/Renewal 31.8 33.9 2.1 48.0 14.1 Subtotal 70.8 60.1 (10.7) 137.0 76.9 Acquisition of Showa Shell Shares 159.0 - (159.0) - - Total 229.8 60.1 (169.7)
Slide 15: (4) Dividend Policy
(4) Dividend Policy ■ Providing shareholder returns is a strong management priority at Idemitsu. We aim to provide stable dividends by achieving an optimal balance between strengthening existing operations, strategic investments towards future business development, improving our financial position,
Slide 16: 3. References
3. References
Slide 17: Table of Contents
Table of Contents 1. Financial Reporting 3. Sales and Production (1) FY 2017 Financials (vs. 2/14 forecasts) (1) Sales/Production Volume (2) Net Sales by Segment (2) Sales/Production Volume Forecast (3) Extraordinary Gains/Losses 4. Foreign Exchange (4) Consolidated Balance Sheet 5. Market Condition
Slide 18: 1. Financial Reporting
1. Financial Reporting (1) FY2017 Results (vs. 2/14 Forecasts) 1) Crude Oil / Exchange Rates (Units: $/Bbl., $/Ton, ¥/$) 2/14 Forecasts FY2017 Actual Difference Crude Oil (DB FOB) 54.9 55.9 1.0 1.8% Crude Oil (Brent) 54.3 54.3 0.0 0.0% Naphtha Price (Customs) 513 520 7.0 1.4% General Coal (NEWC) 88.
Slide 19: 1. Financial Reporting
1. Financial Reporting (1) FY2017 Results (vs. 2/14 Forecasts) 3) Operating Income by Segment (Units: ¥ billions) 2/14 Forecasts FY2017 Actual Difference Petroleum Products 99.0 88.6 (10.4) (10.5%) (Excluding inventory impact) 71.0 57.5 (13.5) (19.0%) Petrochemical Products 37.0 42.2 5.2 14.1% Resou
Slide 20: 1. Financial Reporting
1. Financial Reporting (2) – 1. FY2017 Net Sales by Segment (Units: ¥ billions) FY2016 Actual FY2017 Actual Change Petroleum Products 2,438.2 2,870.8 432.6 17.7% Petrochemical Products 461.2 500.7 39.5 8.6% Resources 227.3 289.4 62.1 27.3% Oil Exploration and Production 73.6 80.8 7.2 9.8% Coal, etc.
Slide 21: 1. Financial Reporting
1. Financial Reporting (2) – 2. FY2018 Net Sales Forecast by Segment (Units: ¥ billions) FY2017 Actual FY2018 Forecast Difference Petroleum Products 2,870.8 3,020.0 149.2 5.2% Petrochemical Products 500.7 540.0 39.3 7.9% Resources 289.4 270.0 (19.4) (6.7%) Oil Exploration and Production 80.8 80.0 (0
Slide 22: 1. Financial Reporting
1. Financial Reporting (3) Extraordinary Gains/Losses (Units: ¥ billions) FY2016 FY2017 Change Gain on Sale of Fixed Assets 1.5 1.7 0.2 Gain on Sale of Affiliate Stock 0.0 12.1 12.1 Other 1.3 0.4 (0.9) Total Extraordinary Gains 2.9 14.3 11.4 Loss on Depletion of Fixed Assets 6.4 3.4 (3.0) Impairment
Slide 23: 1. Financial Reporting
1. Financial Reporting (4) Consolidated Balance Sheet (Units: ¥ billions) 3/31/2017 3/31/2018 Change 3/31/2017 3/31/2018 Change Cash and Deposits 91.4 88.4 (3.0) Payables 331.6 429.6 97.9 Receivables 327.4 486.2 158.8 Short-term Borrowings 471.6 305.9 (165.7) Inventory 430.9 535.6 104.8 Other Curren
Slide 24: 1. Financial Reporting
1. Financial Reporting (5) Consolidated Statement of Cash Flows (Units: ¥ billions) FY2016 FY2017 Change CF from Operating Activities 53.5 136.8 83.2 Net Income before Tax Adjustments 123.0 212.2 89.2 Depreciation Expense 70.2 67.9 (2.3) Increase in Sales Receivables and Inventory (140.8) (265.7) (1
Slide 25: 2. Sensitivity
2. Sensitivity (1) Impact of a US$1/bbl. Increase in Crude Oil Prices on FY Earnings Increase in refinery Petroleum (￥ 0.6 billion) fuel costs, etc. Products Inventory impact ￥ 3.5 billion ￥ 2.9 billion Oil Exploration & Production ￥ 1.0 billion (2) Impact of a 1 JPY/USD Appreciation on FY Earnings
Slide 26: 3. Sales and Production
3．Sales and Production (1)－1.Sales Volume (Domestic Fuel Oil Sales Volume: Non-consolidated) （Units:Thousand KL,% ） FY 2016 FY 2017 Change Gasoline 8,109 7,876 (233) (2.9%) (Premium-Unleaded) 864 825 (38) (4.4%) (Regular-Unleaded) 7,245 7,050 (195) (2.7%) Naphtha 240 280 40 16.7% Jet Fuel 1,678 1,85
Slide 27: 3. Sales and Production
3．Sales and Production （1）－2.Sales Volume (Petrochemical Products: Non-consolidated) (Units:Thousand tons, %) FY 2016 FY 2017 Change Petrochemical Products-Total 3,363 3,450 87 2.6% (Basic Chemicals) 3,316 3,403 87 2.6% (Performance Chemicals) 47 47 (0) (0.3%) （1）－3.Sales Volume (Lubricants) （Units:
Slide 28: 3. Sales and Production
3．Sales and Production （1）－4.Oil Exploration & Production – Production Volume (including Gas) （Units:Thousand BOED） FY 2016 FY 2017 Change Norway 37.4 33.7 (3.7) (10.0%) United Kingdom 5.2 3.3 (2.0) (37.5%) Vietnam 0.3 0.0 (0.3) (100.0%) Total 43.0 37.0 (6.0) (14.0%) Total('000BOE) 15,726 13,493 (2,
Slide 29: 3. Sales and Production
3．Sales and Production （2）－1.Sales Forecasts (Domestic Fuel Oil Sales Volume: Non-consolidated) （Units:Thousand KL,% ） FY 2017 FY 2018(E) Difference Gasoline 7,876 7,700 (176) (2.2%) (Premium-Unleaded) 825 820 (5) (0.7%) (Regular-Unleaded) 7,050 6,880 (170) (2.4%) Naphtha 280 430 150 53.4% Jet Fuel
Slide 30: 3. Sales and Production
3．Sales and Production （2）－2.Sales Forecasts (Petrochemical Products: Non-consolidated) (Units:Thousand tons, % ) FY 2017 FY 2018(E) Difference Petrochemical Products-Total 3,450 3,600 150 4.4% (Basic Chemicals) 3,403 3,550 147 4.3% (Performance Chemicals) 47 50 3 6.8% （2）－3.Sales Forecasts (Lubrica
Slide 31: 3. Sales and Production
3．Sales and Production （2）－4.Oil Exploration & Production – Production Volume Forecasts (including Gas) （Units:Thousand BOED） FY 2017 FY 2018(E) Difference Norway 33.7 26.9 (6.8) (20.2%) United Kingdom 3.3 0.0 (3.3) (100.0%) Total('000BOED) 37.0 26.9 (10.1) (27.3%) Total('000BOE) 13,493 9,810 (3,683
Slide 32: 4. Foreign Exchange (1) USD
4．Foreign Exchange （1）USD Copyright©2018 Idemitsu Kosan Co.,Ltd. All Rights Reserved. 28
Slide 33: 4. Foreign Exchange (2) Norwegian Krone
4．Foreign Exchange （2）Norwegian Krone Copyright©2018 Idemitsu Kosan Co.,Ltd. All Rights Reserved. 29
Slide 34: 4. Foreign Exchange (3) Norwegian Krone
4．Foreign Exchange （3）Norwegian Krone Copyright©2018 Idemitsu Kosan Co.,Ltd. All Rights Reserved. 30
Slide 35: 4. Foreign Exchange (4) Australian Dollar
4．Foreign Exchange （4）Australian Dollar Copyright©2018 Idemitsu Kosan Co.,Ltd. All Rights Reserved. 31
Slide 36: 4. Foreign Exchange (5) Australian Dollar
4．Foreign Exchange （5）Australian Dollar Copyright©2018 Idemitsu Kosan Co.,Ltd. All Rights Reserved. 32
Slide 37: 5. Market Conditions (1) Crude Oil Prices
5．Market Conditions （1）Crude Oil Prices (Dubai and Brent) Copyright©2018 Idemitsu Kosan Co.,Ltd. All Rights Reserved. 33
Slide 38: 5. Market Conditions (2) Gasoline, Crude Oil CIF
5．Market Conditions （2）Gasoline, Crude Oil CIF (Prices and Spreads) Copyright©2018 Idemitsu Kosan Co.,Ltd. All Rights Reserved. 34
Slide 39: 5. Market Conditions (3) Diesel Oil – Crude Oil CIF
5．Market Conditions （3）Diesel Oil – Crude Oil CIF (Prices and Spreads) Copyright©2018 Idemitsu Kosan Co.,Ltd. All Rights Reserved. 35
Slide 40: 5. Market Conditions (4) Paraxylene, Naphtha
5．Market Conditions （4）Paraxylene, Naptha (Prices and Spreads) Copyright©2018 Idemitsu Kosan Co.,Ltd. All Rights Reserved. 36
Slide 41: 5. Market Conditions (5) Styrene Monomer, Naphtha
5．Market Conditions （5）Styrene Monomer, Naptha (Prices and Spreads) Copyright©2018 Idemitsu Kosan Co.,Ltd. All Rights Reserved. 37
Slide 42: 6. Capacity Utilization at Refineries
6．Capacity Utilization at Refineries Copyright©2018 Idemitsu Kosan Co.,Ltd. All Rights Reserved. 38
Slide 43: 7. Number of Service Stations
7．Number of Service Stations Copyright©2018 Idemitsu Kosan Co.,Ltd. All Rights Reserved. 39
Slide 44: 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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