Tokyo Gas Co., Ltd. · TSE:9531

Tokyo Gas — FY2023 3Q Earnings Presentation

40 slides from Tokyo Gas's earnings presentation, Feb 2, 2024

1. Slide 1: FY2023 3Q Financial Results

   TSE:9531 FY2023 3Q Financial Results ended December, 2023 February 2, 2024

2. Slide 2: Today's Key Messages

   Today’s Key Messages 2  Consolidated FY2023 3Q saw a YoY fall in both sales and profits driven by a drop in Energy Solution sales stemming from a decrease in unit price due to resource costs adjustment, and by a decline in Energy Solution profits resulting partly from a change in city gas unit pric

3. Slide 3: FY2023 Consolidated Financial Results

   01 FY2023 Consolidated Financial Results ended December, 2023 Note: The segment information disclosed for FY2023 3Q and FY2022 3Q reflects new segment classifications that went into effect from FY2023 3Q as a result of a restructuring of our system for providing services to local governments. Copyri

4. Slide 4: Highlights: Sales Down, Profit Down

   FY2023 3Q Consolidated Results Sales, Interest, etc. (Apr. 1, 2023 –Dec. 31, 2023) vs. FY2022 3Q 4 Highlights: Sales Down, Profit Down (+/- indicate impact on profit, 100 million yen) Net sales -3,975 Drop in Energy Solution sales by a decrease in city gas unit price due to resource costs adjustment

5. Slide 5: 3Q Results: Sales and Operating Profit/Loss by Business Segments

   FY2023 3Q Results: Sales and Operating Profit/Loss by Business Segments vs. FY2022 3Q 5 (unit : 100 million yen) Segment Profit(Operating profit Net sales*3 + Equity income/loss of subsidiaries) FY2023 3Q FY2022 3Q FY2023 3Q FY2022 3Q Results Results Change ％ Results Results Change ％ Energy solution

6. Slide 6: 3Q Results: Ordinary Profit Analysis

   FY2023 3Q Results : Ordinary Profit Analysis vs. FY2022 3Q 6  Decrease in city gas gross margin -634 (unit : 100 million yen) Change in volume, etc. -318 (incl. change due to temp effect -70), sliding time lag effect -316 Energy (Net sales) -2,311: Change in volume, etc. -866, sliding time lag effe

7. Slide 7: 3Q Consolidated Gas Sales Volume/Number of Customers

   FY2023 3Q Consolidated Gas Sales Volume/ Number of Customers vs. FY2022 3Q 7 City Gas sales volume: Number of customers(City Gas), LNG sales volume, Average temperature （ Unit： mil. ㎥） FY2023 FY2022 -1,128mil.㎥ (-12.4%) 10,000 3Q 3Q Change including temperature effect ‐80mil.㎥,-0.9% 9,084 Number of

8. Slide 8: 3Q Consolidated Electricity Sales Volume/Number of Customers

   FY2023 3Q Consolidated Electricity Sales Volume/ Number of Customers vs. FY2022 3Q 8 Electricity sales volume： New electricity retail customers won by Tokyo Gas （ Unit：mil. kWh ） Quarter (thousands) Cumulative (thousands) -7,007mil. kWh 25,404 300 3,612 3,697 3,766 4,000 25,000 (-27.6%) 3,475 3,314

9. Slide 9: FY2023 Full Year Forecast

   02 FY2023 Full Year Forecast Note: The segment information disclosed for FY2023 Forecast and FY2022 reflects new segment classifications that went into effect from FY2023 3Q as a result of a restructuring of our system for providing services to local governments. Copyright© TOKYO GAS Co., Ltd. All R

10. Slide 10: Highlights: Sales Down, Profit Up (vs. Previous Forecast)

    FY2023 Consolidated Forecast Sales, Interest, etc. (Apr. 1, 2023 – Mar. 31, 2024) 10 Highlights: Sales Down, Profit Up (vs. Previous Forecast) (+/- indicate impact on profit, 100 million yen) vs. Previous Forecast Net sales -410 Decrease in Energy Solution sales driven by lower sales volume for city

11. Slide 11: Consolidated Forecast Assets, Cash Flows, etc.

    FY2023 Consolidated Forecast Assets, Cash Flows, etc. vs. FY2022 11 (Unit: 100 million yen, balance sheet figures are as of the corresponding term-end) FY2023 FY2022 Reference Forecast Results Total assets (a) 40,990 35,814 Increase in new capital expenditures, investments & financing, etc. Increase

12. Slide 12: Investments (Capex, Investments and Financing)

    FY2023 Investments （Capex , Investments and financing） 12 (Unit: 100 million yen) Previous FY2022 Forecast Main Items Change % Change ％ Forecast Results Capital Expenditure Energy solution 822 1,050 -228 -21.7 779 43 5.5 Production facilities : 44 Other Production facilities, etc. City gas*1 291 491

13. Slide 13: Investments: Breakdown of Medium-Term Management Plan

    FY2023 Investments （Capex , Investments and financing） 13 Reference: Breakdown of the Medium-Term Management Plan for FY 2023-2025 (Unit: 100 million yen) FY2023 Previous FY2020-22 FY2023-25 Main Items Forecast Forecast Results Plan 4,758 6,500 Overseas, Renewable power, Urban Development, etc. Grow

14. Slide 14: Full Year Forecast: Sales and Operating Profit by Segment vs. Previous Forecast

    FY2023 Full Year Forecast: Sales and Operating Profit/Loss by Business Segments vs. Previous Forecast 14 (unit : 100 million yen) Segment Profit(Operating profit Net sales*3 + Equity income/loss of subsidiaries) FY2023 Previous FY2023 Previous Forecast Forecast Change ％ Forecast Forecast Change ％ En

15. Slide 15: Forecast: Ordinary Profit Analysis vs. Previous Forecast

    FY2023 Forecast: Ordinary Profit Analysis vs. Previous Forecast 15 (unit : 100 million yen) Energy  Increase in city gas gross margin +164: solution Change in volume, etc. -85 (incl. change due to temp effect -46), +233 sliding time lag effect +249 (+17.7%) (Net sales) -211: Change in volume, etc.

16. Slide 16: Full Year Forecast: Sales and Operating Profit by Segment vs. FY2022

    FY2023 Full Year Forecast: Sales and Operating Profit/Loss by Business Segments vs. FY2022 16 (unit : 100 million yen) Segment Profit(Operating profit Net sales *3 + Equity income/loss of subsidiaries) FY2023 FY2022 FY2023 FY2022 Forecast Results Change ％ Forecast Results Change ％ Energy solution*1

17. Slide 17: Forecast: Ordinary Profit Analysis vs. FY2022

    FY2023 Forecast: Ordinary Profit Analysis vs. FY2022 17 (unit : 100 million yen)  Decrease in city gas gross margin -1,444 Change in volume, etc. -176 (incl. change due to temp effect -40), Energy sliding time lag effect -1,268 solution (Net sales) -3,369: Change in volume, etc. -707, sliding time

18. Slide 18: Full Year Forecast Gas Sales Volume/Number of Customers

    FY2023 Full Year Forecast Consolidated Gas Sales Volume/ Number of Customers 18 City Gas sales volume: Number of customers(City Gas), LNG sales volume, Average temperature （ Unit： mil. ㎥） VS. Previous Forecast Forecast Previous Change FY2022 Change Forecast Results 15,000 -350 mil.㎥ (-3.0%) includin

19. Slide 19: Full Year Forecast Electricity Sales Volume/Number of Customers

    FY2023 Full Year Forecast Consolidated Electricity Sales Volume/ Number of Customers 19 Electricity sales volume： New electricity retail customers won by Tokyo Gas （ Unit：mil. kWh ） Cumulative (1,000s) VS. Previous Forecast 35,000 34,445 4,000 3,804 3,697 -88 mil. kWh 3,475 3,611 (-0.3%) 3,500 3,190

20. Slide 20: Factors for Changes from FY2022 Ordinary Profit

    FY2023 Consolidated Forecast (Apr. 1, 2023 – Mar. 31, 2024) vs. FY2022 20 Factors for Changes from FY2022 Ordinary profit (100 million yen) 4,088 82 Increase in profit from Urban Development business -328 Decrease in profit from Overseas business -241 -88 Decrease in profit Decrease in profit Approx

21. Slide 21: Reference Materials

    03 Reference Materials Copyright© TOKYO GAS Co., Ltd. All Rights Reserved.

22. Slide 22: Gas Gross Margin Sensitivity to Crude Oil Price and Exchange Rate

    Gas Gross Margin Sensitivity to Change in Crude Oil Price and Exchange Rate 22 Impact of rising JCC（Japan Crude Cocktail Prices) by $1/bbl (Unit: 100 million yen) Impact on earnings 4Q Period 4Q -1 Impact of depreciation of the yen by ¥1/$ (Unit: 100 million yen) Impact on earnings 4Q Period 4Q -11

23. Slide 23: Crude oil price・Exchange rate

    Crude oil price・Exchange rate 23 Crude oil price（Japan Crude Cocktail Prices） ($/bbl) 120.00 110.00 100.00 90.00 80.00 70.00 60.00 50.00 40.00 30.00 20.00 FY2023 FY2022 FY2021 Exchange rate (¥/$) 150.0 145.0 140.0 135.0 130.0 125.0 120.0 115.0 110.0 105.0 100.0 FY2023 FY2022 FY2021 Copyright© TOKYO

24. Slide 24: Realizing management mindful of capital costs and stock prices

    Realizing management mindful of capital costs and stock prices 24 Two-pronged approach to improving our PBR: • Pursue business portfolio management to enhance portfolio efficiency/profitability (improve ROE) • Lift market sentiment regarding our future growth potential (improve PER) These strategies

25. Slide 25: Realizing management mindful of capital costs and stock prices

    Realizing management mindful of capital costs and stock prices 25 Trends in key indicators Achieve PBR of more PBR than one early and PER End of Forecast move to a higher level Forecast FY for 2.00 30.00 for this Reasons for ending previous 1.80 quarter change March quarter 25.00 (3Q) 1.60 2024 (2Q)

26. Slide 26: Realizing management mindful of capital costs and stock prices

    Realizing management mindful of capital costs and stock prices 26 (2) Reduction of capital costs 1. Actions for realizing optimal capital structure Calculation of necessary equity based on risk-weighted asset management • Our Group has calculated the amount of risk pertaining to our on-balance sheet

27. Slide 27: Realizing management mindful of capital costs and stock prices

    Realizing management mindful of capital costs and stock prices 27 (2) Reduction of capital costs 2. Shareholder returns About the expected year-end dividend payout for the year ending March 2024 • In accordance with our shareholder return policy, we will strive to achieve a total return ratio of app

28. Slide 28: Key growth investments

    Realizing management mindful of capital costs and stock prices (3) Key growth investments 28 Below are major projects announced following the start of the current medium-term management plan. Going forward, we will provide updates on their status/progress as appropriate. Business area Major projects

29. Slide 29: Key growth investments (Strategy for North American investments)

    Realizing management mindful of capital costs and stock prices 29 (3) Key growth investments (Strategy for North American investments)  We have been expanding in North America, Asia, Australia, and Europe to increase our Overseas Business segment’s profits to 50 billion yen by 2030. We are restruct

30. Slide 30: Key Topics in FY2023 3Q (Excerpted from Press Releases)

    Key Topics in FY2023 3Q (Excerpted from Press Releases) 30 Below are key initiatives of the 3 core strategies of the FY2023-2025 Medium- term Management Plan, which are based on our material issues. The strategies are: “Achieve both stable energy supply & decarbonization,” “Fully roll out Solutions

31. Slide 31: Initiatives for the 3 core strategies

    Key Topics in FY2023 3Q (Excerpted from Press Releases) 31 FY2023-2025 Medium-term Management Plan: Material issues Initiatives for the 3 core strategies Carbon-negative concrete used at Motomachi Elementary School in Yokohama (Apr. 13) Joint acquisition of solar power generation business in Okayama

32. Slide 32: Initiatives for the 3 core strategies

    Key Topics in FY2023 3Q (Excerpted from Press Releases) 32 FY2023-2025 Medium-term Management Plan: Material issues Initiatives for the 3 core strategies TES and Tokyo Gas Forge New Partnership to accelerate the decarbonization of hard to abate sectors through e-NG（Nov. 7） Tokyo Gas Investment in th

33. Slide 33: Initiatives for the 3 core strategies

    Key Topics in FY2023 3Q (Excerpted from Press Releases) 33 FY2023-2025 Medium-term Management Plan: Material issues Initiatives for the 3 core strategies Acquisition of real estate asset management company and entry into private REIT business (Apr. 3)*2 Signing of comprehensive partnership agreement

34. Slide 34: Initiatives for the 3 core strategies

    Key Topics in FY2023 3Q (Excerpted from Press Releases) 34 FY2023-2025 Medium-term Management Plan: Material issues Initiatives for the 3 core strategies Signing of comprehensive partnership agreement for realizing a carbon neutral city in Tochigi City (July 13) Launch of project for increasing soci

35. Slide 35: Initiatives for the 3 core strategies

    Key Topics in FY2023 3Q (Excerpted from Press Releases) 35 FY2023-2025 Medium-term Management Plan: Material issues Initiatives for the 3 core strategies Introduction of renewable energy-derived J-Credit scheme at three Calbee sites at Kiyohara Industrial Park (Oct. 19)*3 Tokyo Gas Real Estate joins

36. Slide 36: Initiatives for the 3 core strategies

    Key Topics in FY2023 3Q (Excerpted from Press Releases) 36 FY2023-2025 Medium-term Management Plan: Material issues Initiatives for the 3 core strategies Signing of comprehensive partnership agreement for promoting carbon neutrality and realizing highly disaster-resilient urban development in Inagi

37. Slide 37: Initiatives for the 3 core strategies

    Key Topics in FY2023 3Q (Excerpted from Press Releases) 37 FY2023-2025 Medium-term Management Plan: Material issues Initiatives for the 3 core strategies Notification of Resolution to Acquire of Treasury Shares (Apr. 26) - Nihon L'Oreal and Tokyo Gas Real Estate reach agreement on promoting building

38. Slide 38: Launch of Solutions business brand IGNITURE

    Key Topics in FY2023 3Q (Excerpted from Press Releases) 38 Here is a look at one example of how we are advancing the three core strategies of our FY2023-2025 Medium-term Management Plan. This particular initiative contributes to our efforts to fully roll out the Solutions business. Launch of Solutio

39. Slide 39: Overseas Projects

    Overseas Projects 39 9 1 2 4 5 7 3 6 8 Area No Country Subject Main Business Participation year Eagle Ford Upstream Shale gas 2016 TG Natural Resources Upstream Shale gas 2017 TGES America Downstream Energy Service 2015 1 U.S.A Birdsboro Power Plant Downstream Natural gas power 2017 North America Ak

40. Slide 40: Cautionary Statement regarding Forward-looking Statements

    < Cautionary Statement regarding Forward‐looking Statements > Statements made in this presentation with respect to Tokyo Gas’s present plans, forecasts, strategies and beliefs, and other statements herein that are not expressions of historical fact are forward‐looking statements about the future per

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