Slide 1: Presentation on Results for FY 2018
Presentation on Results for FY 2018 Idemitsu Kosan Co.,Ltd. May 15, 2019
Slide 2: Table of Contents
Table of Contents 1. Overview of the New Integrated Company 2. FY 2018 Results (1) Overview (2) Segment Information (3) Showa Shell Sekiyu FY 2018 3. Forecast for FY 2019 Performance (1) Overview (2) Segment Information (3) Investments (4) Shareholder Returns 4. Reference Materials Copyright©2019 Id
Slide 3: Overview of the New Integrated Company
Overview of the New Integrated Company Copyright©2019 Idemitsu Kosan Co.,Ltd. All Rights Reserved.
Slide 4: Overview of the New Integrated Company
Overview of the New Integrated Company Functional Materials Petroleum Segment Segment Refining capacity: 945,000 BD *1 (Lubricants, performance chemicals, electronic ※１ materials, functional asphalt, agricultural- biotechnology, solid electrolyte) Domestic fuel oil sales volume: 43.0 million KL/year
Slide 5: FY 2018 Results
FY 2018 Results
Slide 6: Crude Oil Price Trends
Crude Oil Price Trends <Monthly Dubai Crude Oil Price Trends and Assumptions for Performance Forecasts> (USD/Bbl.) FY 2017 Actual FY 2018 Actual FY 2018 Average: FY 2019 Assumption US$69.3/Bbl. FY 2019 Assumption: US$70.0/Bbl. FY 2017 Average: US$55.9/Bbl. Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb
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) FY 2017 Average: 110.9 JPY/USD FY 2018 Average: 110.8 JPY/USD FY 2019 Assumption: 110.0 JPY/USD FY 2017 Actual FY 2018 Actual FY 2019 Assumption Apr May Jun Jul Aug Sep Oct Nov Dec J
Slide 8: Overview
Overview <FY 2018 results> ■ Operating income decreased by ¥22.0 billion year-on-year, to ¥179.3 billion, as increased profits in the resources segment resulting from an increase in resources prices were more than offset by the decrease in the petroleum products segment due to inventory impact, amon
Slide 9: (1) Overview
(1) Overview 1) Crude Oil / Exchange Rates (Units: $/Bbl., $/Ton, ¥/$) FY 2017 FY 2018 Change Crude Oil (Dubai) 55.9 69.3 13.5 24.1% Crude Oil (Brent) 54.3 71.0 16.8 30.9% Naphtha Price (Customs) 520 621 101 19.5% Thermal Coal (NEWC) 88.9 107.1 18.2 20.5% Exchange Rate (TTM) 110.9 110.8 (0.1) (0.1%)
Slide 10: (2) Segment Information
(2) Segment Information 1) Operating Income (Units: ¥ billions) FY2017 FY2018 Change Petroleum Products 88.6 56.5 (32.1) (36.3%) (Excluding inventory impact) 57.5 50.5 (7.0) (12.2%) Petrochemical Products 42.2 31.8 (10.4) (24.7%) Resources 66.8 87.1 20.3 30.4% Oil Exploration and Production 27.2 37.
Slide 11: (2) Segment Information
(2) Segment Information 2) Analysis of Factors Affecting Operating Profits (Year-on-year) (Units: ¥ billions) Product Margins, Synergies, etc. Exploration Others/ Costs, Price, Reconcili- Foreign Sales Volume ation Price-, Exchange, Sales etc. Volume Foreign Increase in Exchange Refinery Product Fue
Slide 12: (3) Showa Shell Sekiyu FY2018
(3) Showa Shell Sekiyu FY2018 Consolidated Income Statement (Summary) FY 2018 has 15 months (January 1, 2018 to March 31, 2019), due to a change in the fiscal year end (Units: ¥ billions) (Reference) Jan/2017- Jan/2018- Change Mar/2018 Mar/2019 Net Sales 2,647.7 3,082.8 435.1 16.4% Oil Business 88.2
Slide 13: Forecast for FY 2019 Performance
Forecast for FY 2019 Performance ・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)
Slide 14: (1) Overview
(1) Overview 1) Crude Oil / Exchange Rates (Units: $/Bbl., $/Ton, ¥/$) FY2018(E) FY2019 Forecast Change Crude Oil (Dubai) 69.3 70.0 0.7 1.0% Crude Oil (Brent) 71.0 72.0 1.0 1.4% Naphtha Price (Customs) 621 650 29 4.7% Thermal Coal (NEWC) 107.1 93.0 (14.1) (13.1%) Exchange Rate (TTM) 110.8 110.0 (0.8
Slide 15: (2) Segment Information
(2) Segment Information 1) Operating Income + Equity Income (Units: ¥ billions) FY2018(E) FY2019 Forecast Change Petroleum 79.8 78.0 (1.8) (2.3%) (Excluding inventory impact) 69.0 78.0 9.0 13.0% Basic Chemicals 50.4 45.5 (4.9) (9.8%) Functional Materials 33.2 39.0 5.8 17.4% Power and (7.5) 2.0 9.5 －
Slide 16: (2) Segment Information
(2) Segment Information 2) Analysis of Factors Affecting Operating Income + Equity Income (excluding inventory impact, year-on-year) (Units: ¥ billions) ES Business Power Business Extra- ordinary Synergies, Factors, Equity etc. income etc. Sales Volume, Price Margins, Product Sales Volume Margins Fu
Slide 17: (2) Segment Information: Integration Synergies with Showa Shell Sekiyu
(2) Segment Information (3) Integration Synergies with Showa Shell Sekiyu (vs. FY 2015) (Units:¥ billions) FY 2018 FY 2019 Section Major Initiatives Actual Forecast Crude Oil ・Joint procurement of crude oil ・Joint allocation of crude oil tankers 1.0 1.5 Procurement ・Reduction of ship chartering and
Slide 18: (3) Investments
(3) Investments (Units: ¥ billions) FY 2018 FY 2019 Change Estimate Forecast Strategic 100.1 122.0 21.9 Maintenance/Renewal 57.6 71.0 13.4 Total 157.7 193.0 35.3 Depreciation Expense 86.1 103.0 16.9 (including goodwill amortization) Copyright©2019 Idemitsu Kosan Co.,Ltd. All Rights Reserved. 14
Slide 19: (4) Shareholder Returns
(4) Shareholder Returns ■Policy With consideration for the returns to shareholders is an important responsibility of management, the New Integrated Company will steadily secure shareholder returns by realizing the effects of integration ■FY 2019-2021 Plan Aim to achieve cumulative net income of over
Slide 20: Reference Materials
Reference Materials
Slide 21: Table of Contents
Table of Contents 1. Financial Reporting 2. Sensitivity (1) FY 2018 Results (vs. 2/14 forecasts) 3. Sales and Production (2) Net Sales by Segment (1) Sales/Production Volume (3) Extraordinary Gains/Losses (2) Sales/Production Volume Forecast (4) Consolidated Balance Sheet 4. Market Conditions (5) Co
Slide 22: 1. Financial Reporting: FY 2018 Results vs. 2/14 Forecasts
1. Financial Reporting (1) FY 2018 Results (vs. 2/14 Forecasts) 1) Crude Oil / Exchange Rates (Units: $/Bbl., $/Ton, ¥/$) 2/14 Forecasts FY2018 Actual Difference Crude Oil (Dubai) 68.4 69.3 0.9 1.4% Crude Oil (Brent) 71.0 71.0 0.0 0.0% Naphtha Price (Customs) 619 621 2 0.3% Thermal Coal (NEWC) 107.3
Slide 23: 1. Financial Reporting: Operating Income by Segment
1. Financial Reporting (1) FY 2018 Results (vs. 2/14 Forecasts) 3) Operating Income by Segment (Units: ¥ billions) 2/14 Forecasts FY2018 Actual Difference Petroleum Products 47.0 56.5 9.5 20.2% (Excluding inventory impact) 47.0 50.5 3.5 7.4% Petrochemical Products 34.0 31.8 (2.2) (6.5%) Resources 85
Slide 24: 1. Financial Reporting: FY2018 Net Sales by Segment
1. Financial Reporting (2) FY2018 Net Sales by Segment (Units: ¥ billions) FY 2017 FY 2018 Change Petroleum Products 2,870.8 3,488.9 618.1 21.5% Petrochemical Products 500.7 555.4 54.7 10.9% Resources 289.4 308.0 18.6 6.4% Oil Exploration 80.8 77.5 (3.3) (4.1%) and Production Coal, etc. 208.6 230.5
Slide 25: 1. Financial Reporting: Extraordinary Gains/Losses
1. Financial Reporting (3) Extraordinary Gains/Losses (Units: ¥ billions) FY2017 FY2018 Change Gain on Sale of Fixed Assets 1.7 4.2 2.5 Gain on Sale of Affiliate Stock 12.1 0.2 (11.9) Other 0.4 7.1 6.7 Total Extraordinary Gains 14.3 11.5 (2.8) Loss on Sale and Depletion 3.4 3.0 (0.4) of Fixed Assets
Slide 26: 1. Financial Reporting: Consolidated Balance Sheet
1. Financial Reporting (4) Consolidated Balance Sheet (Units: ¥ billions) 3/31/2018 3/31/2019 Change 3/31/2018 3/31/2019 Change Cash and Deposits 88.4 91.9 3.4 Payables 429.6 399.2 (30.4) Receivables 486.2 453.3 (32.9) Short-term Borrowings 305.9 368.7 62.8 Inventory 535.6 586.6 50.9 Other Current L
Slide 27: 1. Financial Reporting: Consolidated Fiscal Status
1. Financial Reporting (5) Consolidated Fiscal Status (Estimates as of 4/1/2019) （Units：\ billions） Assets Liabilities and Net Assets Total Current Assets 1,820.0 Total Liabilities 2,850.0 Shareholders’ Equity Other Comprehensive Income 1,240.0 （Goodw ill and Custom er-related assets ） 250.0 Noncont
Slide 28: 1. Financial Reporting: Consolidated Statement of Cash Flows
1. Financial Reporting (6) Consolidated Statement of Cash Flows (Units: ¥ billions) FY2017 FY2018 CF from Operating Activities 136.8 151.0 Net Income before Tax Adjustments 212.2 144.7 Depreciation Expense 67.9 61.6 Increase in Sales Receivables and Inventory (265.7) (26.7) Other 122.4 (28.6) CF fro
Slide 29: 2. Sensitivity
２. Sensitivity (1) Impact of a US$1/bbl. Increase in Crude Oil Prices on FY Earnings Increase 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 Appreciation on FY Earnings Decrease in re
Slide 30: 3. Sales and Production: Domestic Fuel Oil Sales Volume
3. Sales and Production (1)－1.Sales Volume (Domestic Fuel Oil Sales Volume: Non-consolidated) （Units:Thousand KL,%） FY 2017 FY 2018 Change Gasoline 7,876 7,691 (184) (2.3%) (Premium-Unleaded) 825 777 (49) (5.9%) (Regular-Unleaded) 7,050 6,915 (136) (1.9%) Naphtha 280 384 104 37.0% Jet Fuel 1,856 1,9
Slide 31: 3. Sales and Production: Petrochemical and Lubricants Sales Volume
3. Sales and Production （1）－2.Sales Volume (Petrochemical Products: Non-consolidated) (Units:Thousand tons, %) FY 2017 FY 2018 Change Petrochemical Products-Total 3,450 3,543 93 2.7% (Basic Chemicals) 3,403 3,493 90 2.6% (Performance Chemicals) 47 50 3 6.9% （1）－3.Sales Volume (Lubricants) （Units:Tho
Slide 32: 3. Sales and Production: Oil E&P and Coal Production Volume
3. Sales and Production （1）－4.Oil Exploration & Production – Production Volume (including Gas) （Units:Thousand BOED） FY 2017 FY 2018 Change Norway 33.7 26.8 (6.9) (20.4%) United Kingdom 3.3 0.0 (3.3) (100.0%) Total 37.0 26.8 (10.1) (27.4%) Total('000BOE) 13,493 9,795 (3,698) (27.4%) *Figures based o
Slide 33: 3. Sales Forecasts (Petroleum Segment)
3. Sales and Production (2)－1.Sales Forecasts (Petroleum Segment) %） （Units:Thousand KL,%） FY 2019 FY 2018（E） Difference Forecast Gasoline 15,386 14,880 (507) (3.3%) Naphtha 447 390 (57) (12.8%) Jet Fuel 5,261 5,310 49 0.9% Kerosene 4,452 4,610 158 3.5% Diesel Oil 11,380 11,060 (320) (2.8%) Heavy Fu
Slide 34: 3. Sales Forecasts by Segment
3. Sales and Production (2)－2.Sales Forecasts (Basic Chemicals Segment) ns, %) (Units:Thousand tons, %) FY 2019 FY 2018（E） Difference Forecast Basic Chemicals 4,289 4,270 (19) (0.4%) (2)－3.Sales Forecasts (Functional Materials Segment) L,%） （Units:Thousand KL,Thousand tons,%） FY 2019 FY 2018 Differe
Slide 35: 3. Oil E&P and Coal Production Forecasts
3. Sales and Production （2）－5.Oil E&P – Production Volume Forecasts ,including Gas (Resources Segment) （Units:Thousand BOED） FY 2019 FY 2018 Difference Forecast Norway 26.8 22.7 (4.1) (15.3%) Total('000BOE) 9,795 8,300 (1,495) (15.3%) *Figures based on interest owned by Idemitsu's resource developme
Slide 36: 4. Market Conditions: Crude Oil Prices (Dubai and Brent)
4. Market Conditions （1）Crude Oil Prices (Dubai and Brent) Copyright©2019 Idemitsu Kosan Co.,Ltd. All Rights Reserved. 31
Slide 37: 4. Market Conditions: Gasoline, Crude Oil CIF
4. Market Conditions （2）Gasoline, Crude Oil CIF (Prices and Spreads) Copyright©2019 Idemitsu Kosan Co.,Ltd. All Rights Reserved. 32
Slide 38: 4. Market Conditions: Diesel Oil, Crude Oil CIF
4. Market Conditions （3）Diesel Oil – Crude Oil CIF (Prices and Spreads) Copyright©2019 Idemitsu Kosan Co.,Ltd. All Rights Reserved. 33
Slide 39: 4. Market Conditions: Paraxylene, Naphtha
4. Market Conditions （4）Paraxylene, Naptha (Prices and Spreads) Copyright©2019 Idemitsu Kosan Co.,Ltd. All Rights Reserved. 34
Slide 40: 4. Market Conditions: Styrene Monomer, Naphtha
4. Market Conditions （5）Styrene Monomer, Naptha (Prices and Spreads) Copyright©2019 Idemitsu Kosan Co.,Ltd. All Rights Reserved. 35
Slide 41: 5. Capacity Utilization at Refineries
5．Capacity Utilization at Refineries Copyright©2019 Idemitsu Kosan Co.,Ltd. All Rights Reserved. 36
Slide 42: 6. Number of Service Stations
6．Number of Service Stations Copyright©2019 Idemitsu Kosan Co.,Ltd. All Rights Reserved. 37
Slide 43: 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