Chubu Electric Power Group's Key Pillars of the New Medium-Term Management Plan[PDF:339 KB]

Chubu Electric Power Group's Key Pillars of the New Medium-Term

Management Plan

April 28, 2026

Chubu Electric Power Company, Incorporated

Status of Responses to Inappropriate Matters, etc. Regarding the inappropriate matters related to the formulation of standard seismic motion in the conformity review for compliance with the new regulatory requirements at the Hamaoka Nuclear Power Station, the investigation by the investigation committee composed solely of independent external experts is still ongoing. However, in order to be reborn as a company that can once again earn the trust of all stakeholders, we are steadily advancing initiatives based on the three pillars that should be addressed as priorities: "Transforming Mindset and Behavior," "Transforming the Organization and Organizational Culture," and "Strengthening Rules and Mechanisms."

In accordance with the Core Values established in April 2026, management will lead by example

and practical education and awareness-building initiatives for employees at all levels will be carried out on an ongoing basis.

At the Nuclear Power Division, education and training programs using specific case studies are being actively and steadily implemented to ensure that all officers and employees place the highest priority on compliance and consistently exercise sound judgment and take appropriate actions.

Going forward, taking into account the findings of the investigation committee, we will consider and formulate further improvement and response measures, including governance reform, and will work on them across the entire company to ensure that such inappropriate matters never occur again.

Transforming Mindset and Behavior

In accordance with the Core Values established in April 2026, management will lead by example

and practical education and awareness-building initiatives for employees at all levels will be carried out on an ongoing basis.

At the Nuclear Power Division, education and training programs using specific case studies are being actively and steadily implemented to ensure that all officers and employees place the highest priority on compliance and consistently exercise sound judgment and take appropriate actions.

In the Nuclear Power Division, a Deputy General Manager from outside the division will lead and

promote cultural reform aimed at enhancing organizational transparency.

Human resource systems designed to enhance organizational transparency and psychological safety will be introduced and their operation strengthened, including accelerated personnel rotation and further use of multi-rater feedback.

Specific measures will be developed based on studies and proposals by younger employees concerning the future of the Chubu Electric Power Group

In the Nuclear Power Division, a comprehensive inspection and review of business processes,

rules, and mechanisms such as check functions will be carried out, proactively incorporating external perspectives.

In internal audits, the accuracy of risk assessments will be improved, and the validity and rationality of rules will also be evaluated.

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In the Nuclear Power Division, a Deputy General Manager from outside the division will lead and promote cultural reform aimed at enhancing organizational transparency.

Human resource systems designed to enhance organizational transparency and psychological safety will be introduced and their operation strengthened, including accelerated personnel rotation and further use of multi-rater feedback.

Specific measures will be developed based on studies and proposals by younger employees concerning the future of the Chubu Electric Power Group

Transforming the Organization and Organizational Culture

Strengthening Rules and Mechanisms

In the Nuclear Power Division, a comprehensive inspection and review of business processes, rules, and mechanisms such as check functions will be carried out, proactively incorporating external perspectives.

In internal audits, the accuracy of risk assessments will be improved, and the validity and rationality of rules will also be evaluated.

Review of the Previous Medium-term Management Plan (FY2022-FY2025)

Despite significant changes in the business environment, we achieved the FY2025 management targets, etc. (consolidated ordinary profit, ROIC and ROE)

On the other hand, as our performance includes temporary factors that have boosted profits, and as profit contributions from strategic investments are still in a growth phase, we recognize the improvement of ROE as one of our most important management issues going forward.

Consolidated ordinary profit Achievements and Issues

Target

200.0 billion yen or more

ROIC

Target

3.2% or more

ROE

Indicative target

Approx. 7%

Results

284.0 billion yen

Results 4.4％

Results 7.5％

We achieved the management targets of the previous Medium-term Management Plan (consolidated ordinary profit and ROIC).

We expanded our business domains through strategic investments.

While certain companies such as ES-CON JAPAN, Eneco, and Toshiba have contributed to business growth and/or corporate value enhancement, profit contributions from other areas remain limited, resulting in challenges in capital efficiency, particularly ROIC.

In new growth areas, businesses such as telemetering generated synergies with the energy domain, but there are also many areas where synergies have remained limited.

We exercised governance over JERA through measures such as the dispatch of directors and management-level dialogue. Although JERA's FY2025 profit target of 200.0 billion yen was missed slightly, we assess that JERA has developed a commensurate level of earnings capacity. Going forward, we will work to strengthen capital efficiency and other aspects.

Note: Consolidated ordinary profit, ROIC, and ROE exclude time-lag impacts.

At the time of formulating the previous Medium-term Management Plan, we assumed a contraction of the domestic energy business due to factors such as the progress of energy conservation. However, against the backdrop of GX and DX, medium- to long-term electricity demand is now expected to trend upward, and we anticipate expanding growth opportunities for the energy business.

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Given our limited management resources, we will accelerate asset replacement and other measures through a policy of selection and concentration in order to enhance capital efficiency.



Basic Approach to Improving Capital Efficiency

To improve ROE, we aim to build a business portfolio that achieves profit growth with the energy business as its core.

To this end, we will advance the consideration of asset replacement based on indicators such as ROIC, growth investments to realize the targeted business portfolio, and capital policies.

More specific measures will be presented in the new Medium-term Management Plan, taking into account the findings of the investigation conducted by the Investigation Committee.

ROE

Target Level (Within approximately

five years)

8% or higher

Asset Replacement

Amid the advancement of GX and DX, we will capture growing demand and realize profit growth with the energy business as the core through optimization of the power procurement portfolio, flexible pricing that reflects cost fluctuations, and the provision of decarbonization value.

We will secure competitiveness and profitability through selective focus on areas where synergy with the energy business can be leveraged, including the effective use of resources and know-how.

Through the implementation of digital technologies, we will enhance service quality and productivity and promote the reallocation of human resources to areas with higher growth potential.

After setting ROIC targets by business, we will implement asset replacement for businesses and projects where improvements in ROIC or the realization of synergies are not expected.

Funds generated through asset replacement will be invested, with synergy realization as a prerequisite, in areas where growth potential and capital efficiency can be enhanced, with the aim of achieving ROIC targets at the business level.

Upholding our approach to optimal capital structure, and from a medium-term perspective toward achieving ROE of 8%, we will, on the premise of steadily implementing investments related to safety and stable supply, review our approach to share buybacks, including their potential, timing, and scale, taking into account the balance with growth investments.

Toward addressing S+3E challenges, we aim to become a company that innovates infrastructure for the future by centering on the energy business, through the implementation of advanced technologies such as AI, as well as cross-industry collaboration and the combination with synergy businesses.

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*With regard to Management Vision 2.0, we are considering a review in light of changes in the business environment surrounding the Group.

What We Aim to Achieve under the New Medium-term Management Plan and the Direction of Our Growth Strategy

By combining the Group's strengths with the energy domain at the core and working to strengthen the energy value chain, we will achieve sustainable growth together with all stakeholders.

Responding to customer needs and social issues

Responding to customer needs and social issues

Strengthening the value chain by positioning the energy business as the core, integrating synergy businesses, and leveraging people, functions, and data across the Group.

Deepening Group

Pillars of the growth strategy

Creating demand and ensuring

stable supply

management

Providing low- and decarbonization

value

Expanding synergy businesses

Electrification of industrial processes, provision of solutions to support the digital transformation of regional industries, and guiding large-scale demand to suitable locations.

Develop and renew power sources and enhance the resilience of the fuel portfolio in response to the aging of existing thermal power facilities and electricity demand.

Promote the use of gas-fired thermal power as a core power source and advance the shift to LCF (low-carbon fuel) thermal power, including hydrogen and ammonia

Secure renewable energy power sources in light of the investment environment and contribute to decarbonization not only in the domestic energy domain but also in other areas.

Promote reductions in emissions from society and customers.

Expand into areas where synergies with the energy business can be expected.

As an infrastructure operator, promote initiatives such as community development.

e.g., Multi-utility / Real Estate

Further refining our strengths by strengthening our business foundation

Strengths

A customer base, brand strength, and area-wide business locations cultivated through our deep roots in the Chubu region

Further refining our strengths by

strengthening our business foundation

Human resources with expertise in customer proposals for electrification and energy conservation (solutions), the pursuit of flexibility and economic efficiency through fuel trading, infrastructure operation know-how, and knowledge and experience in decarbonization and stable energy supply.

With the energy business as our core, we will promote operational transformation (productivity improvement) and the advancement of businesses and services through the implementation of advanced technologies such as AI.

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A pioneering spirit that continues to take on challenges, including the separation of power generation and retail sales and the creation of synergies.

Direction of Selection and Concentration

To achieve sustainable growth, we will optimally allocate management resources to our energy businesses (core businesses) and synergy businesses.

By setting targets for and monitoring ROIC by business, we will implement asset replacement toward the realization of our growth strategy.

Past

［Management Vision 2.0 / Previous Medium-term Management Plan, etc.］

Accelerated expansion of services outside the service area

✖ Withdraw / Scale down

Recovery in the energy domain from the Ukraine crisis

New Medium-term Management Plan (within approximately five years)

By advancing selection and concentration, we will shift away from diversification and achieve growth with energy at the core.

A company that will innovate infrastructure for the future through the fusion of energy businesses and synergy businesses, together with Group companies

We will focus on areas where synergies can be created with energy .

Long term

Accelerated initiatives in new growth fields

Concentrate

Synergy

Core businesses

Core businesses

Main results of initiatives to date Direction of Selection and Concentration▲ Select carefully

examples

Acquisition of DPC and establishment of CD Energy Direct(accelerating sales expansion outside the service area)

Energy

Miraiz business model transformation(electrification solutions / building an EMS platform)

Accelerated renewable energy development investment(withdrawal from certain businesses)

Establishment of the Global Business Division

New Growth

Establishment of the Business Development Division (exploration and commercialization of new growth areas)

Establishment of the Regional

Replace low-ROIC and

non-synergistic assets

Stable supply (next-generation networks, securing supply capacity, etc.)

Creating demand

Providing decarbonization value, etc. (GX/DX solutions, EMS rollout)

Strengthening differentiation and competitiveness

▲ Securing renewable energy and other power sources in Japan and overseas in light of the investment environment

▲ Asset replacement in existing global investment projects

Group management aimed at strengthening the value chain

✖ Exit from businesses where achieving synergies and improving capital efficiency is challenging

Synergy businesses

Value chain optimization through group-wide use of people, assets, and capabilities

Business

foundation

Business foundation

Infrastructure Business Department (water resources / resource recycling / forestry businesses)

Business foundation

Establishment of the Real Estate Business Division(with ES-CON JAPAN made a subsidiary)

Establishment of the Digital Transformation Promotion Department (development of the DX foundation / cultivation of DX human resources)

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Establish the Multi-Utility Business Division, focusing on the water resources, resource circulation, and agricultural/forestry resource fields. In the real estate business, pursue synergies with core businesses.

Establishment of the Digital Transformation Division Accelerate transformation through the implementation of advanced technologies by means of digital and innovation investment.

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Direction of the New Shareholder Return Policy

We will maintain our approach to the optimal capital structure, with a shareholders' equity ratio in the mid-30% to upper-30% range as a guide, and will consider and implement capital policy with a view to achieving an ROE of 8% in the medium term..

As it is necessary to carefully assess the impact of the situation in the Middle East and the inappropriate matters, and also taking into account the findings of the investigation committee, we will present our new shareholder return policy in the new Medium-term Management Plan.

Past（2025）

New Medium-term Management Plan (Within approximately five years)

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Optimal capital structure, etc.

Dividends

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