Corporate Performance Briefing and Management Policy for FY2008

Transcription

1 Corporate Performance Briefing and Management Policy for FY2008 Global Toyo for Client Value Enhancement May 14, 2008 Yutaka Yamada President & CEO

2 Contents Looking Back FY2007: Mid-term Plan Achieved One Year Earlier 2. Market Trends: Plant Industry 3. Sales/Profits/New Business 4. Evolution for Cost-Reimburse Service 5. FY2008 Financial Target and Management Objectives

3 1. Looking Back FY2007: Mid-term Plan Achieved One Year Earlier 2. Market Trends: Plant Industry 3. Sales/Profits/New Business 4. Evolution for Cost-Reimburse Service 5. FY2008 Financial Target and Management Objectives

4 1.1 Sales Mid-term Plan Achieved 1 Year Earlier Sales (Billion Yen Consolidated Non-Consolidated FY2005 FY2006 FY2007 FY2008 FY2008 Actual Actual Actual Mid-term Plan Target

5 1.2 ProfitMid-term Plan Achieved 1 Year Earlier Consolidated Profit (billion Yen) (%: Gross Margin Ratio) FY2005 FY2006 FY2007 FY2008 FY2008 Actual Actual Actual Mid-term Plan Target

6 1.3 Global Toyo Resources: HR Augmentation Proceeds Number of Personnel 5,500 6,400 6,000 4,800 2,000 2,600 3,600 3,000 Overseas Subsidiaries (India, Korea, Thai, Malaysia, China, etc.) 1,300 1,350 1,200 1,400 Domestic Subsidiaries (Toyo Business Engineering Corp., etc.) Toyo-Japan 1,500 1,550 1,600 1,600 End of March 2006 Actual End of March 2007 Actual End of March 2008 Actual End of March 2009 Mid-term Plan

7 1. Looking Back FY2007: Mid-term Plan Achieved One Year Earlier 2. Market Trends: Plant Industry 3. Sales/Profits/New Business 4. Evolution for Cost-Reimburse Service 5. FY2008 Financial Target and Management Objectives

8 2.1 Plant Market: Remain steady for years Background Continuous Economic Boom in oil & gas states Diversification of Energy Resources & Energy Conversion Needs Economic Surge in BRICs & Other Emerging Countries Acceleration of Environment-related Projects Number of Plant Projects by Area (World-wide) Concern Uncertainty in in World Economy &US dollar bear Continuity in in Higher Construction Cost Prolonged Equipment Delivery Continuity in in Shortfall of of Human Resources Rise of of Nationalism over Natural Resources Catching-up of of Contractors in in Medium Developed Nations Number of Plant Projects by Product (World-wide) R

9 2.2 Market Trends : Plant Investment Upstream Investment Resource exploration activities on-going strategically both in mid- & long-term. Improved Recovery Rate of Exist. Reservoirs Innovation in Exploration Tech. Population/GDP/Energy Fund Energy Portfolio Investment Enthusiasm for oil-substitute development for transportation fuel International Collaboration Sustainable Growth Balanced with Global Environment Non-conventional Oil: Oil Sand/ Tar Synthetic Oil: GTL/DME/CTL Bio-fuel: Bio-ethanol Global Warming Technology Downstream Investment Innovation Environmental & Social Investment mezzanine, now at the time of Infrastructure Investment stage gate review for the next phase of Urgent needs for Environment Issues, global CAPEX shortage of clean water & power Value chain integration all through Upstream/ Downstream/Chemicals Mostly located either in oil & gas producing countries or in emerging economies & vicinities Rapid reduction needs of GHG Infrastructure development in emerging economies Infrastructure renovation in developed nations

10 1. Looking Back FY2007: Mid-term Plan Achieved One Year Earlier 2. Market Trends: Plant Industry 3. Sales/Profits/New Business 4. Evolution for Cost-Reimburse Service 5. FY2008 Financial Target and Management Objectives

11 Portfolio of Orders in FY 2007 Service Product Gas Processing Refinery Refinery Petrochemicals Fertilizer O&M Assistance Service Region / Type of Project Brazil National Oil Company: Gas Processing Plant Expansion Korea Private Oil Company: Refinery Expansion Project s FEED Japan Private Oil Company: Pyrolysis Gasoline Desulfurization IndonesiaNational Oil Company: Propylene Yield Expansion VenezuelaNational Petrochemical Company: Urea Plant Japan Maintenance Optimization, Periodical Repair Management etc. Well-diversified Product/Regional-mix, as Planned Continue to Seek Portfolio Balance

12 Regional Backlog As of end of March, 2008 Billion Yen Middle East Africa 59.3 Russia Central Asia 16.4 India 51.6 China S-E E Asia Japan 63.5 FY 2007 Backlog Others 5.2 Venezuela Brazil Total Back log: 444 Billion Yen

13 3.3 Focusing on New Business : zero in on the Market Trends Upstream: Resource Resource Exploration Exploration Technical Technical Assistance Assistance for for Improvement Improvement of of Recovery Recovery Rate Rate of of Existing Existing Gas Gas Reservoir Reservoir FPSO FPSO (Floating (Floating Production, Production, Storage Storage and and Offloading) Offloading) 2 2 Project Project in in Australia Australia Energy Energy Portfolio: GTL GTL (Gas (Gas to to Liquid) Liquid) Qatar Qatar GTL- GTL- Project, Project, on on Going Going DME DME (Dimethyl (Dimethyl Ether) Ether) Completed Completed World-largest World-largest Plant Plant in in China China Environment: Compact Compact GTLOffshore GTLOffshore compact compact GTL GTL utilizing utilizing accompanied accompanied natural natural gas gas N 2 O 2 CDM CDM N N 2 O 2 Clean Clean Development Development Mechanism Mechanism project project in in China China CCS CCS Technical Technical development development for for Carbon Carbon Capture Capture & Storage Storage Social Social Infrastructure: Water/Transportation/PowerCollaboration Water/Transportation/PowerCollaboration with with Alliance Alliance Partners Partners

14 1. Looking Back FY2007: Mid-term Plan Achieved One Year Earlier 2. Market Trends: Plant Industry 3. Sales/Profits/New Business 4. Evolution for Cost-Reimburse Service 5. FY2008 Financial Target and Management Objectives

15 4.1 What is Cost-Reimburse Service? Cost-Reimburse Service Service Service ScopeProject ScopeProject Definition, Definition, License, License, FS, FS, FEED*, FEED*, EPsCm, EPsCm, Consultation Consultation *FEED: Front End Engineering Design PaymentCost-Reimburse + Fee Fee + Incentive Incentive Professional Engineering Contractor EPsCm Detail Design Service Incentive Project Definition FEED Service Roll-over Procurement Management Service Construction Management Service completion Technology Selection Basic Spec for Plant Performance Project Grand Design Basic Design Package Project Master Schedule & Budgeting Procurement Service of LLI (Long-lead Item) EPC Lump-Sum Detail Design Procurement Construction completion

16 Client s Benefit in Cost-Reimburse Service Early Early Deployment of of Professional Engineering Contractor Risk Risk Mitigation throughout Total Total Project Project Life Life Accelerated Project Project Delivery Flexible Project Project Execution Transparency & Accountability EPsCm Cost Reimburse Service EDC Start of Operation EPC Lump-sum Project Tendering, Bidding & Clarification EDC Start of Operation

17 4.3 Contractor s Benefit in Cost-Reimburse Service Accountable & Matured Relationship with with Client Client Tempering Professionalism through Client-Interaction Contribution to to Steady Steady Corporate Performance Policy for Sales Portfolio [Overseas EPC LS] : [Overseas Cost-Reimburse + Domestic] 50:50 (Gross Plofit)

18 1. Looking Back FY2007: Mid-term Plan Achieved One Year Earlier 2. Market Trends: Plant Industry 3. Sales/Profits/New Business 4. Evolution for Cost-Reimburse Service 5. FY2008 Financial Target and Management Objectives

19 billion Yen Financial Target (Consolidated) FY2007 FY2008 Current Actual Target Mid-term Plan Plan (FY 2008: 3 rd Year) Sales Gloss Profit (10.5%) (10.6%) (11.2%) Ordinary Profit (4.9%) (5.0%) (3.8%) Net Net Income (2.5%) (2.7%) (2.5%) New New Order

20 Management Objectives for FY2008 Management Management Objectives Objectives for for FY2008 FY2008 Securing Profit through Pursuing Steady Implementation of ofongoing Projects Continuous Continuous Reinforcement Reinforcement of of Project Project Management Management Control Control Abundant New New Orders with with Proper Balance Seeking Seeking Proper Proper Portfolio Portfolio of of Region, Region, Product Product and and Contract-Type Contract-Type Continue Business Innovation New New Business Business Social Social Infra., Infra., O&M O&M Service Service etc. etc. & Building-up Building-up up of of Technology Technology Base Base Reinforcement Reinforcement of of Execution Execution Power Power for for Advanced Advanced Service Service Consecutive Consecutive Enhancement Enhancement of of Global Global Toyo Toyo Formation Formation Towards Next Next Medium-term Plan Plan

21 For further questions on this material, please contact: URL Akanehama, Narashino, Chiba, Japan Kunihiko MIYAWAKI IR Manager Corporate Planning & Administration Unit Tel Forward-looking Statements This presentation may contain forward-looking statements about the Toyo Engineering Corporation identified by the fact that they do not relate strictly to historical or current facts. These statements are based on currently available to the management of the Toyo Engineering Corporation, and subject to risks and uncertainties that could cause the Toyo Engineering Corporation s actual results, performance, achievement or financial condition to differ from those described or implied in the forward-looking statements. The Toyo Engineering Corporation undertakes no obligation to publicly update any forward-looking statements after the date of presentation. These potential risks and uncertainties include, but are not limited to: competition within the financial services industries in Japan and overseas, our ability to adjust our business focus and to maintain profitable strategic alliances, volatile and sudden movements in the international securities markets, foreign exchange and global economic situations affecting the Toyo Engineering Corporation.