JGC Corporation. Hideo Masuda Vice Chairman and CFO. January 2008 CONTENTS

Transcription

1 JGC Corporation Engineering for the Quality of Human life Hideo Masuda Vice Chairman and CFO January 2008 CONTENTS Settlement of Accounts Transition of Operation income Business Fields -New Contracts by Business field JGC s Trends in Orders Received Summary of Outstanding Contracts Market Environment Outlook Market Environment Changes Affecting Contractors Focused Regions and Sectors Target Management Figures Non-EPC business strategy Catalysts & chemical products Segment Information by Business segment Non-EPC business strategy Enterprise investment 1

2 1 Settlement of Accounts (Billions of yen) March 31, 2005 (%) March 31, 2006 (%) March 31, 2007 (%) March 31, 2008 (exp.) (%) Net sales Gross profit (6.5) (6.6) (7.2) (11.3) Operating income (3.0) (3.7) (4.3) (7.7) Net income (2.7) (2.7) (3.3) (4.7) New contracts Transition of Operating income 43.0 billion Yen 20.3 billion Yen 26.4 billion Yen 13.2 billion Yen FY2004 FY2005 FY2006 FY2007 2

3 3 Business Fields New Contracts by Business field Oil & Gas Development Petroleum Refining LNG Fiscal Year Chemical Power Generation, Nuclear Power, New Energy Living and General Production Environmental Protection, Social Development and IT Others Forecast : 540, , , , , , ,000 Millions of Yen 4 JGC s Trends in Orders Received Steady Increase towards the goal of JGC mid-term management plan 550 billion Yen (average) 570 billion Yen (average) 480 billion Yen (average) FY FY FY

4 Others Summary of Outstanding Contracts FY2005 FY2006 1, by Business sector Others (Unit : Billions of Yen) by Region Chemical (16.0%) Middle East (0.5%) LNG (24.9%) (43.5%) Petroleum refining Oil & gas development (17.7%) (27.1%) (14.2%) Africa 47.4 Asia Japan (3.2%) (20.8%) (32.0%) FY2005 FY2006 FY2005 FY Market Environment Outlook World forecast for 2008: US$54 billion to be spent on oil, gas, and petrochemical facilities, representing a 9% year-on-year increase ($49.8 billion in 2007) Source: Hydrocarbon Processing, Market Data2008 In the MENA region, more than US$260 billion to be invested In oil and gas downstream facilities from 2008 thru 2012 (The forecast done in 2007 for the same period set the figure at $200 billion.) Source: Middle East Economic Survey, API CORP research 4

5 7-1 Market Environment Changes Affecting Contractors Chronic supply shortages continued due to the shortfall In the capacities of equipment vendors, and more seriously, materiel suppliers. Number of projects by Clients Capacities of contractors Capacities of vendors & subcontractors Supply capacity Manufactures Skilled labor Construction equipment makers 7-2 Market Environment Changes Affecting Contractors 2007 and beyond Rises in equipment/materials costs and shortage of quality subcontractors Increase in plant construction costs Tendency to delay investment decisions for planned projects Vendors invest to expand their facilities; materiel prices settle down Environment surrounding contractors is likely to improve 5

6 7-3 Market Environment Changes Affecting Contractors Actual and estimated level of labor needed for construction in the Middle East These figures will level off because investment in planned projects will be delayed. However, the levels will remain high Required labor volume Estimate for 2007 Actual volume * Data from JGC sources 8 Focused Regions and Sectors The second half of 2007 through 2008 Continued targeting of large-scale projects in the Middle East, Africa, and Asia where investment in equipment is active. For the Japanese market, we will remain focused on the same sectors. Middle East Africa Asia Japan Oil Refineries, Gas/Oil related and Petrochemicals LNG and Gas related LNG and Oil Refineries Oil Refineries, Petrochemicals and others Total value for the focused projects: 1 trillion yen level 6

7 JGC Group Scenario 2010 : New Medium-Term Management Plan 9 Target Management Figures Net Sales Net Income Dividend Payout Ratio (non-consolidated) Annual Dividend Per Share (non-consolidated) ROE End of Fiscal billion yen 15 billion yen 25% 11 yen 9.3% End of Fiscal 2010 (Goal) 600 billion yen 30 billion yen 25% 23 yen 11.0% or more 7

8 10 Non-EPC business strategy Catalysts & chemical products Increasing revenue to 50 billion Yen in FY2010 Enhance fine chemicals business that uses nanotechnology - Polishing materials for wafer surfaces - Interlayer insulating film for semiconductors - Surface antireflective coating for flat panel displays - Hard coating for plastic lenses - Cosmetic materials - Anode materials for secondary batteries Titania Sol Insulating Coat Liquid Conductive Coat Liquid 11 Segment Information by Business segment (Unit : Billions of Yen) Total engineering % Catalysts and fine chemical products % FY % % Net sales FY % % Difference Operating income FY % % 26.4 FY % % 20.3 Difference Total engineering Catalysts and Fine Chemical Products FY2006 FY2005 FY2006 FY Net sales Operating income 8

9 12-1 Non-EPC business strategy Enterprise investment [1] Water & Power Generation U.A.E. Existing facilities performing well. Construction proceeding smoothly for the completion in mid-2008 Existing Water & Power facilities (U.A.E.) Water & Power Generation - Saudi Arabia Construction proceeding smoothly for the completion in mid-2008 Water & Power facilities under construction (Saudi Arabia) 12-2 Non-EPC business strategy Enterprise investment [2] Environment Business Juhua CDM received first CER in December Other projects also in progress Juhua chemical plant (China) Resource development business Acquired interest in more small oil & gas fields in Mexico; will continue along same lines Rig in operation 9

10 for Reference JGC Corporation Engineering for the Quality of Human life Hideo Masuda Vice Chairman and CFO January Expected Growth of Net Sales Billion yen FY

11 2 Expected Growth of Net Income Billion yen FY Investment Planning On the Basis of a Secure Financial Foundation 1. Investing in Enterprises 40 billion yen Target IRR : 12% or more From 2010 onward, recovery of investment 2. E&C Business Focusing on M&A for expansion of core business 11

12 4 LNG Plant Construction Projects Trains : 31 (31.6% of world total) Production : 90 million tons (35.9% of world total) Egypt 5,000,000 T/Y, 1 train Nigeria 2,950,000 T/Y, 3 trains 4,000,000 T/Y, 3 trains Qatar 3,300,000 T/Y, 2 trains Brunei 1,440,000 T/Y, 5 trains Yemen Indonesia 1,500,000 T/Y, 1 train 3,350,000 T/Y, 2 trains 3,800,000 T/Y, 2 train Malaysia 2,530,000 T/Y, 3 trains 2,650,000 T/Y, 3 trains 3,870,000 T/Y, 2 trains Australia 2,430,000 T/Y, 3 trains 4,200,000 T/Y, 1 train 5 Outlook for World LNG Demand America Europe Asia Actual Forecast Actual Forecast Actual 168 (million tons/year) 2020 Forecast World LNG consumption in 2006: 155 million tons Estimated demand in 2020: 379 million tons Need to add facilities to meet needs for 10 million tons/year production increases annually over next 15 years Source: IEEJ Asia/world Energy Outlook 2006 BP statistical review

13 6 Planned LNG Projects JGC has been involved in many of these projects Algeria -Arzew LNG Trinidad & Tobago - Atlantic LNG T5 Venezuela - Deltana Caribe LNG Russia - Schtokman LNG -Baltic LNG Lybya - Marsa al-brega LNG Nigeria -OK LNG - Nigeria LNG 7 Plus - Brass LNG Equatorial Guinea -LNG T2 Egypt -SEGAS LNG T2 - Iduku LNG T3 Malaysia - Malaysia LNG T9 Australia - Gorgon LNG - Sunrise LNG - Pilbara LNG -Browse LNG - Ichthys LNG Iran -Pars LNG - Persian LNG -IranLNG Indonesia -Tangguh LNG T3 -Donggi-Senoro LNG -Masela LNG Papua New Guinea - Papua New Guinea LNG *Red indicates projects in which JGC provided FEED and/or EPC for existing facilities Algeria Arzew LNG Gas Development Oil & Gas Development GAS Processing Oil Field Development LPG Petrochemical Complex Oil Recovery Facility Equatorial Guinea LNG Saudi Arabia Domestic Yanbu Export Jubail Export Ras Tanura & Petrochemical Complex Gas & Oil Separation Ethylene Complex Gas Field Development 7 Projects Planned - Middle East and Africa Nigeria Brass LNG OK LNG Nigeria LNG GTL Expansion Gas & Oil Separation FPSO Gas Development Libya Gas Pipeline Gas & Oil Separation Gas Development LNG Egypt Segas LNG 2nd Train Iduku LNG 3rd Train Petrochemical Complex Angola FPSO Offshore Oil & Gas Development Iraq Upgrade Gas Processing Oil & Gas Development Kuwait Upgrade Gas Processing Iran Iran LNG Pars LNG Persian LNG Gas Processing Expansion & Modernization Petrochemical Complex Oil & Gas Development Oil Field Upgrade Extra Heavy Oil Bahrain Qatar Lube Base Oil Gas Processing QP/Honam Petrochemical Complex QP/ExxonMobil Petrochemical Complex Shell Petrochemical Complex Oman Bitumen U.A.E. & Petrochemical Complex Gas Processing Oil Development Integrated Gas Development Gasoline & Aromatics Gas Compression 13

14 8 Projects Planned - Asia and Oceania Taiwan Lube Base Oil Ethylene Thailand Thai Oil Bangchak NPC/PTT Expansion Upgrading Aromatics Vietnam Nghi Son Lon Son Petrochemical Malaysia MLNG T3 Debottlenecking MLNG T9 Lube Base Oil Debottlenecking Petronas/PSR Export Singapore Upgrading Papua New Guinea LNG Indonesia Tangguh LNG T3 Donggi-Senoro LNG Masela LNG Oil Development Australia Gorgon LNG ICHTHYS LNG Pluto LNG Pilbara LNG Browse LNG Sunrise LNG 9 EPC Business Strategy Continuous increase of manpower resources Being increased ahead of schedule 8,200 employees 8,500 employees 7,000 employees Overseas 3,300 Overseas 4,000 Overseas 4,300 Target for Mid-term Management plan Japan 3,700 Japan 4,200 Japan 4,200 名 FY2005 March 2007 FY

15 10 Outstanding Contracts as Percentage by Business Region 0.4% 0.1% Japan 32.0% Africa 43.5% Asia 3.2% Middle East 20.8% Oceania Total 752 billion as of end of March 2007 North & Central South America 11 Progress Image 100 % 100% 80% Construction Progress 20% Progress months Time Schedule 15

16 12 Top International Contractors in 2006 Contracting Revenue from project outside home country Over All RANK Industrial / Petroleum 1 HOCHTIEF ( Germany ) 1 TECHNIP ( France ) 2 SKANSKA ( Sweden ) 2 BECHTEL ( U.S.A. ) 3 VINCI ( France ) 3 FLUOR ( U.S.A. ) 4 5 STRABAG ( Austria ) BOUYGUES ( France ) 4 5 JGC CCC ( Greece ) Consolidated Contractors Int l Co. Sal 15 JGC 16 CHIYODA 23 KAJIMA 24 TAISEI authority: ENR 20 Aug The Top International Contractors 13 Steel Cost Trend Cost Index SS Hot-Rolled Plate (SS304) CS Hot-Rolled Plate Feb-02 Apr-02 Jun-02 Aug-02 Oct-02 Dec-02 Feb-03 Apr-03 Jun-03 Aug-03 Oct-03 Dec-03 Feb-04 Apr-04 Jun-04 Aug-04 Oct-04 Dec-04 Feb-05 Apr-05 Jun-05 Aug-05 Oct-05 Dec-05 Feb-06 Apr-06 Jun-06 Aug-06 Oct-06 Dec-06 Feb-07 Apr-07 Jun-07 Aug-07 Oct-07 Time Source: MEPS (International) CS Structural Steel CS Hot-Rolled Plate CS Structural Steel SS Hot-Rolled Plate (SS304) 16

17 14 Main Products Catalysts & Chemical Industries Co., Ltd. Alcohol Flocculant Heavy Oil Gasoline Precision Cast Binder Organic Solvent Sol Video Tape Filler UV Block/Soft Focus Materials Kerosene, Diesel Poly Vinyl Chloride ZSM-5 De-NOx Catalyst VCM Synthesizing Catalyst FCC Catalyst Zeolite Direct Desulfurization Catalyst Indirect Desulfurization Catalyst Oil Refining Catalyst Environmental Protection Business Fine Chemical PetrochemistryBusiness New Business Nanoparticle Alignment Technology Sol/gel Preparation Technology Silica/Alumina Sol Memory Materials Anti-bacterial Agent Thin-film Preparation Technology Cosmetic Materials Optical Materials Semiconductor Display Materials Conductive Materials LCD-related Materials Ultra-Fine Silica related Titania Sol Conductive Coat Liquid materials Colloidal Anti- Bacterial Agent Hard Coat for Plastic Lenses CRT Surface Coat Material Insulating Planarization Material for Semiconductors Insulating Coat Liquid Carrier Tape Ultra-precise Silica Particles 17