ENEOS : Q＆A （70KB） （70KB）

About this update from Eneos Holdings, Inc.

ENEOS Holdings (5020) Analysts' Meeting Q&A for the fiscal year ended March 31, 2025, and the Fourth Medium-Term Management Plan ￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣ Date & time: Monday, May 12, 2025 (16:00 - 17:00) Attendees: 153 Principal questions: Please find below ￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣ － This document contains forward-looking statements. A cautionary statement appears in the endnote. － Q. You have set an operating profit target of 500 billion yen excluding inventory valuation for the final year of the Medium-Term Management Plan. I would like you to let me know the roadmap to achieve this target. A. We plan to improve operational efficiency by promoting AI utilization across the company, and to fundamentally strengthen profitability by restructuring the organization and structure of approximately 650 subsidiaries. In the renewable energy business, we also expect to improve profitability by installing storage batteries in our existing solar power plants and to recover returns on the upfront investment. In the petroleum products business, a moderate recovery in the chemicals market is factored in as an external element that will contribute to increasing profits. However, even if the market conditions do not improve, we believe that the conditions are within a range we can cover through self-help efforts such as improving returns through carefully selected investments and ensuring improvement in efficiency. Q. I would like to ask about the company's commitment to achieving ROE of 10%. In the event you expect to fall short of the profit target, do you plan to take measures to control your equity capital, including share buybacks? A. As in the past, we strongly remain committed to focusing on ROE and ROIC. We estimate that the ROE target can be achieved through our efforts in terms of both profit and capital, which are the numerator and denominator of ROE. However, we will discuss further which is ultimately better, maximizing the profit or reducing the capital. Q. I would like you to let me know the background to the Allocation Management set in the cash flow plan for the Fourth Medium-Term Management Plan. A. The Allocation Management was established to execute flexible cash allocation to strategic investments and additional returns in an uncertain business environment. Regarding strategic investments, we are not yet at the stage of disclosing specific projects, but we are always seeking investment opportunities through M&A and other means. Additional returns will be promoted in a way that contributes to ROE. We will utilize the Allocation Management as a means of pursuing the best balance between strategic investments and shareholder returns to enhance corporate value. SQ. Is it correct to understand that cash inflows from the sale of JX Advanced Metals shares are included in Allocation Management? SA. Yes, the use of cash from the sale of JX Advanced Metals and maritime transportation business is included in the Allocation Management. This document contains forward-looking statements. Actual results may differ materially from those expressed or implied by forward-looking statements due to various factors, including but not limited to the following: macroeconomic conditions and changes in the competitive environment in the energy, resources, or materials industries revision of laws and tightening of regulations risk of lawsuits and other legal risks

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