Security Code
5020
August 10, 2023
ENEOS Holdings, Inc.
FY2023 1Q Financial Results
Agenda
Initiatives Aimed at Enhancing Corporate Value | P3 |
Highlights of Financial Results for FY2023 1Q | P6 |
Business Environment | P8 |
Financial Results for FY2023 1Q | P11 |
Reference | P18 |
Excerpt from Third Medium-Term Management Plan | P21 |
2
Copyright © ENEOS Holdings, Inc. All Rights Reserved.
3
Initiatives Aimed at Enhancing Corporate Value
Copyright © ENEOS Holdings, Inc. All Rights Reserved.
Initiatives Aimed at Enhancing Corporate Value
4
Current Status Analysis (Capital Cost・Profitability)
PBR(X) =1
Equity Spread (ROE - Shareholders Capital Cost)
Shareholders Capital Cost - Expected Growth Rate
Average ROE has been around 6% over the past 5 years.
① Our Perceived Cost of Capital
WACC | 4% | Disclosed in Third Medium- | |
Term Management Plan | |||
Shareholders | We recognize at around 8% | |
Capital Cost | based on CAPM. | |
Expected | Assumed that expected growth | |
rate from the market is | ||
Growth Rate | ||
negative. | ||
PBR(X) | ②PBR and ROE Trend | |||||||||||||||
1.0 | ||||||||||||||||
From Dec. 2017 to Feb. 2018, | ||||||||||||||||
0.86 | and Jun. 2018 to Oct. 2018, | 0.87 | ||||||||||||||
the PBR exceeded 1x. | ||||||||||||||||
Highest price: 901 yen/share (Sep 21, 2018) | 0.80 | |||||||||||||||
0.8 | ||||||||||||||||
0.73 | 0.72 | 0.69 | ||||||||||||||
0.67 | 0.62 | |||||||||||||||
13% | 0.58 | 0.60 | 12% | 12% | 9% | |||||||||||
0.6 | ||||||||||||||||
8% | 0.52 | 0.51 | ||||||||||||||
6% | 6% | 0.49 | ||||||||||||||
5% | 5% | |||||||||||||||
3% | ||||||||||||||||
3% | 1% | |||||||||||||||
0.4 | ||||||||||||||||
2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
ROE
28%
18%
8%
PBR
Analysis: Factors in PBR falling below 1.0x
- Historical equity spread performance has been negative.
- Due to the expected decline in domestic demand for petroleum, which is one of our main businesses, and the uncertainty about what businesses could cover this decline, market expectations
for growth are low.
Including a long-term time horizon.
ROE | ROE((excl. inventory valuation) ※As of the end of the | |
each fiscal year |
Analyzed similar company cases, including overseas companies.
Confirmed improvement measures to exceed PBR of 1.0x:
・Enhancing ROE, including through the withdrawal from low-profit businesses.
・Disclose progress of growth businesses such as biofuels, etc.
Copyright © ENEOS Holdings, Inc. All Rights Reserved.
Initiatives Aimed at Enhancing Corporate Value
5
① Improve ROE and achieve a positive equity spread | Continue to achieve results in ① ② |
② Accelerate efforts towards achieving energy transition | |
Profits increased due to improvement in refinery trouble, actual margins, etc.
Operating Income excl. inventory valuation (¥bn)
22/1Q | 23/1Q | ||
117.2 | +7. | 7 | 124.9 |
Energy | Energy | ||
39.3 | +10 | .8 | 50.1 |
Targets and initiatives during
Third Medium-Term Management Plan
Elements for improving PBR are included in each measure
of Third Medium-Term Management Plan.
6 | 10 | ROE10% | Net D/E ratio | Fully commit to achieving | |||||||||||||
7 | 0.8 or low | Third Medium-Term | |||||||||||||||
3 | Free CF | Management Plan | |||||||||||||||
500.0 ¥bn | |||||||||||||||||
'22 '23 '24 | '25 … '30 '40 |
Improvement | ||
in ROE | ||
Improvement | Increase in | |
expected | ||
in PBR | ||
growth rate |
Capital cost
reduction
Utilizing debt at a moderate level
Strengthening earning power in existing businesses
Improved refinery efficiency | Mainly from FY2023~ | Business process | |
reengineering | … etc. | ||
Strengthening earning power through investment for growth
Improve electricity | Expand | Increase | New factories | ||
profit through | profit growth | capacity | for advanced | … etc. | |
Goi Project | in Elastomers | of Tangguh | materials | p.22-24 |
Growth through the realization of energy transitions
Renewable | SAF | CCS | Hydrogen … etc. | |
energy | p.25-27 | |||
Strengthening the management foundation
Rigorous portfolio management based on ROIC | …etc. |
Businesses below WACC ⇨ Initiate radical management improvement within 3 years | p.28-30 |
Shareholder returns that consider optimal capital structure
and capital cost | p.31 |
Enhancing dialogue through proactive disclosure to the market and feedback to management.
Moreover・・・
- The post-IPO portfolio plan will be disclosed at the time of JX Metals IPO.
Allocation capital raised through IPO: Optimal balance between growth investments and shareholder returns1 with the consideration of an appropriate
D/E ratio.
1These shareholder returns will not be based on the return policy in Third Medium-Term Management Plan.
- Strive to enhance disclosure of milestones and progress of growth businesses in order to gain market understanding.
- Towards achieving PBR over 1.0x, we will continue to analyze and discuss regularly at the management level, engaging in dialogues with the market.
Copyright © ENEOS Holdings, Inc. All Rights Reserved5.
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Eneos Holdings Inc. published this content on 10 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 August 2023 04:52:00 UTC.