Idemitsu Kosan Co., Ltd. · TSE:5019

Idemitsu Kosan — Q3 FY2019 Earnings Presentation

35 slides from Idemitsu Kosan's earnings presentation, Feb 14, 2020

  1. Slide 1: Presentation on Results for the 3rd Quarter FY2019

    Presentation on Results for the 3rd Quarter FY2019 Idemitsu Kosan Co.,Ltd. February 14, 2020

  2. Slide 2: Table of Contents

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

  3. Slide 3: FY 2019 3rd Quarter Topics

    FY 2019 3rd Quarter Topics Copyright©2020 Idemitsu Kosan Co.,Ltd. All Rights Reserved.

  4. Slide 4: FY 2019 3rd Quarter Topics

    FY 2019 3rd Quarter Topics １．Nghi Son Refinery in Vietnam （1）Maintenance in December ①Overview: Inspection and maintenance aimed at correcting initial defects in refinery facilities. Conducted upon the shut down of all equipment. ②Period: Commenced in late October and completed in mid- December as p

  5. Slide 5: FY 2019 3rd Quarter Results

    FY 2019 3rd Quarter 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)

  6. Slide 6: Crude Oil Price Trends

    Crude Oil Price Trends <Monthly Dubai Crude Oil Price Trends and Assumptions for Performance Forecasts> （＄／BL) (USD/Bbl.) 90 2018年度 FY 2018 Actual 2019年度 FY 2019 Actual 11/14公表前提 11/14 Assumption FY 2018 3Q Average: US$71.3/Bbl. 2018年度第3四半期平均：71.3$/BL 80 2019年度第3四半期平均：63.5$/BL FY 2019 3Q Average: US

  7. Slide 7: JPY/USD Exchange Rate (TTM) Trends

    JPY/USD Exchange Rate (TTM) Trends <Monthly JPY/USD (TTM) Trends and Assumptions for Performance Forecasts> (JPY/USD) （円／米＄ （円／米＄) 115 2018年度 FY 2018 Actual FY 2018 3Q Average: 111.1 JPY/USD 2018年度第3四半期平均：111.1円/ 2019年度 FY 2019 Actual 11/14公表前提 11/14 Assumption 110 FY 2019 3Q Average: 108.7 2019年度第3

  8. Slide 8: Overview

    Overview <FY 2019 3rd Quarter Results> ■ Operating income excluding inventory impact + equity income decreased by ¥88.6 billion year-on-year, to ¥96.7 billion, mainly due to decreased equity income from the petroleum segment, reduced product margins in the basic chemicals segment, and decreasing ope

  9. Slide 9: (1) Overview

    (1) Overview 1) Crude Oil / Exchange Rates (Units: $/Bbl., $/Ton, ¥/$) FY 2018 3Q FY 2019 3Q Change Crude Oil (Dubai) 71.3 63.5 (7.7) (10.8%) Crude Oil (Brent) 72.1 64.9 (7.2) (10.0%) Naphtha Price (Customs) 652 534 (118) (18.1%) Thermal Coal (NEWC) 108.0 81.3 (26.7) (24.7%) Exchange Rate (TTM) 111.

  10. Slide 10: (2) Segment Information

    (2) Segment Information 1) Operating Income + Equity Income (Units: ¥ billions) FY 2018 3Q(E) FY 2019 3Q Change Petroleum 87.3 16.8 (70.5) (80.8%) (Excluding inventory impact) 67.5 26.1 (41.4) (61.4%) Basic Chemicals 39.4 18.0 (21.4) (54.4%) Functional Materials 25.2 20.2 (4.9) (19.5%) Power and Ren

  11. Slide 11: (2) Segment Information

    (2) Segment Information 2) Analysis of Factors Affecting Operating Income + Equity Income (Units: ¥ billions) (Excluding inventory impact, year-on-year) (14.5) Margins, Volume, (26.9) Crude premium Synergies, Equity (21.4) ES Income, etc. (3.3) Exploration 11.2 Costs, FX, 185.3 Product (4.9) Power (

  12. Slide 12: Shareholder Returns

    Shareholder Returns Copyright©2020 Idemitsu Kosan Co.,Ltd. All Rights Reserved.

  13. Slide 13: Shareholder Returns Policy FY2019-2021

    Shareholder Returns Shareholder Returns Policy FY2019-2021 Total payout ratio of 50% or higher • The minimum dividend is ¥160 per share and at least 10% of returns to shareholders will be allocated to share buyback • All repurchased shares will be canceled Share buyback ・ Share buyback commenced on

  14. Slide 14: Reference Materials

    Reference Materials

  15. Slide 15: Table of Contents

    Table of Contents １. Overview of the New 5. Market Conditions Integrated Company 6. Refineries Utilization 2. Financial Reporting 7. Number of Service (1) Forecast for FY 2019 Stations (2) FY 2019 3rd Quarter Results 3. Sensitivity 4. Sales and Production (1) Sales/Production Volume (2) Sales/Produc

  16. Slide 16: 1. Overview of the New Integrated Company

    １. Overview of the New Integrated Company Petroleum Segment Functional Materials Segment Refining capacity: 945,000 BD *1 (Lubricants, performance chemicals, electronic ※１ materials, functional asphalt, agricultural- biotechnology, solid electrolyte) Domestic fuel oil sales volume: 43 million KL/yea

  17. Slide 17: 2. Financial Reporting

    2. Financial Reporting （１） Forecast for FY 2019 1) Crude Oil / Exchange Rates (Units: $/Bbl., $/Ton, ¥/$) Assumptions 5/15 Forecast 11/14 Forecast Difference (Oct~ ) Crude Oil (Dubai) 70.0 63.1 (6.9) (9.9%) 60.0 Crude Oil (Brent) 72.0 63.4 (8.6) (11.9%) 61.5 Naphtha Price (Customs) 650 515 (135) (20

  18. Slide 18: 2. Financial Reporting

    2. Financial Reporting 3) Operating Income + Equity Income (vs. 5/15 Forecast) (Units: ¥ billions) 5/15 Forecast 11/14 Forecast Difference Petroleum 78.0 31.0 (47.0) (60.3%) (Excluding inventory impact) 78.0 59.0 (19.0) (24.4%) Basic Chemicals 45.5 45.0 (0.5) (1.1%) Functional Materials 39.0 31.0 (8

  19. Slide 19: 2. Financial Reporting

    2. Financial Reporting (2) FY 2019 3rd Quarter Results 1) Net Sales by Segment (Units: ¥ billions) FY 2018 3Q(E) FY 2019 3Q Change Petroleum 4,063.6 3,630.4 (433.2) (10.7%) Basic Chemicals 466.7 350.0 (116.7) (25.0%) Functional Materials 325.2 294.0 (31.3) (9.6%) Power and Renewable Energy 105.8 94.

  20. Slide 20: 2. Financial Reporting

    2. Financial Reporting (2) FY 2019 3rd Quarter Results 2) Extraordinary Gains/Losses (Units: ¥ billions) FY 2018 3Q(E) FY 2019 3Q Change Gain on Sale of Fixed Assets 3.3 2.3 (1.0) Gain on Sale of affiliate stock 0.2 0.0 (0.2) Gain on Business Transfer 2.3 0.0 (2.3) Gain from Step Acquisition 0.0 17.

  21. Slide 21: 2. Financial Reporting

    2. Financial Reporting (2) FY 2019 3rd Quarter Results 3) Balance Sheet (Units: ¥ billions) 4/1/2019 12/31/2019 Change 4/1/2019 12/31/2019 Change Cash and Deposits 141.7 125.2 (16.5) Total Current 1,781.2 1,841.5 60.3 Liabilities Receivables, Total Fixed Inventory, etc. 1,677.8 1,715.3 37.5 Liabilit

  22. Slide 22: 3. Sensitivity

    ３. Sensitivity (1) Impact of a US$1/bbl. Decrease in Crude Oil Prices on FY Earnings Decrease in refinery ￥1.0billion Petroleum fuel costs, etc. Inventory impact (￥5.0 billion) (￥4.0 billion) Oil Exploration & Production (￥1.0 billion) (2) Impact of a 1 JPY/USD Depreciation on FY Earnings Increase i

  23. Slide 23: 4. Sales and Production

    ４. Sales and Production (1)－1.Sales Volume (Petroleum Segment) %） （Units:Thousand KL,%） FY 2018 3Q （E） FY 2019 3Q Change Gasoline 11,610 10,902 (708) (6.1%) Naphtha 274 207 (67) (24.4%) Jet Fuel 3,934 3,869 (65) (1.6%) Kerosene 2,369 2,293 (77) (3.2%) Diesel Oil 8,561 8,089 (472) (5.5%) Heavy Fuel O

  24. Slide 24: 4. Sales and Production

    ４. Sales and Production (1)－2.Sales Volume (Basic Chemicals Segment) %) (Units:Thousand tons, %) FY 2018 3Q （E） FY 2019 3Q Change Basic Chemicals 3,154 2,961 (193) (6.1%) (1)－3.Sales Volume (Functional Materials Segment) ） （Units:Thousand KL,Thousand tons,%） FY 2018 3Q FY 2019 3Q Change Lubricants 9

  25. Slide 25: 4. Sales and Production

    ４. Sales and Production （1）－5.Oil E&P – Production Volume ,including Gas (Resources Segment) ED） （Units:Thousand BOED） FY 2018 3Q FY 2019 3Q Change Norway 27.2 20.9 (6.3) (23.2%) Total('000BOE) 7,416 5,692 (1,724) (23.2%) *Figures based on interest owned by Idemitsu's resource development subsidiari

  26. Slide 26: 4. Sales and Production

    ４. Sales and Production (2)－1.Sales Volume Forecasts (Petroleum Segment) （Units:Thousand KL,%） 5/15 Forecast 11/14 Forecast Difference Gasoline 14,880 14,350 (530) (3.6%) Naphtha 390 300 (90) (23.0%) Jet Fuel 5,310 5,230 (80) (1.5%) Kerosene 4,610 4,350 (260) (5.6%) Diesel Oil 11,060 10,700 (360) (3

  27. Slide 27: 4. Sales and Production

    ４. Sales and Production (2)－2.Sales Volume Forecasts (Basic Chemicals Segment) (Units:Thousand tons, %) 5/15 Forecast 11/14 Forecast Difference Basic Chemicals 4,270 4,210 (60) (1.4%) (2)－3.Sales Volume Forecasts (Functional Materials Segment) （Units:Thousand KL,Thousand tons,%） 5/15 Forecast 11/14

  28. Slide 28: 4. Sales and Production

    ４. Sales and Production （2）－5.Oil E&P – Production Volume Forecasts ,including Gas (Resources Segment) （Units:Thousand BOED） 5/15 Forecast 11/14 Forecast Difference Norway 22.7 21.7 (1.0) (4.5%) Total('000BOE) 8,300 7,930 (370) (4.5%) *Figures based on interest owned by Idemitsu's resource developme

  29. Slide 29: 5. Market Conditions

    ５. Market Conditions （1）Crude Oil Prices (Dubai and Brent) 29 Copyright©2020 Idemitsu Kosan Co.,Ltd. All Rights Reserved.

  30. Slide 30: 5. Market Conditions

    ５. Market Conditions （2）Gasoline – Crude Oil CIF (Prices and Spreads) 30 Copyright©2020 Idemitsu Kosan Co.,Ltd. All Rights Reserved.

  31. Slide 31: 5. Market Conditions

    ５. Market Conditions （3）Diesel Oil – Crude Oil CIF (Prices and Spreads) 31 Copyright©2020 Idemitsu Kosan Co.,Ltd. All Rights Reserved.

  32. Slide 32: 5. Market Conditions

    ５. Market Conditions （4）Paraxylene, Mixed xylene, Naptha (Prices and Spreads) 32 Copyright©2020 Idemitsu Kosan Co.,Ltd. All Rights Reserved.

  33. Slide 33: 5. Market Conditions

    ５. Market Conditions （5）Styrene Monomer, Naptha (Prices and Spreads) 33 Copyright©2020 Idemitsu Kosan Co.,Ltd. All Rights Reserved.

  34. Slide 34: 6. Refineries Utilization 7. Number of Service Stations

    ６．Refineries Utilization Capacity Utilization(%) BCD FY2015 FY2016 FY2017 FY2018 FY2019 3Q Idemitsu 86% 88% 88% 88% 86% Showa Shell 91% 85% 88% 93% ７．Number of Service Stations Locations FY2015 FY2016 FY2017 FY2018 FY2019 3Q Idemitsu 3,666 3,589 3,545 3,501 3,453 Showa Shell 3,193 3,123 3,028 2,964

  35. Slide 35: 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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