“Challenge” uncharted territory. Challenge. Power Group Vision, and “3-year Action Plan” to...
Transcript of “Challenge” uncharted territory. Challenge. Power Group Vision, and “3-year Action Plan” to...
“Challenge” uncharted territory. “Challenge” competition. “Challenge” with fresh ideas.
Challenge. - Toward the growth of the Group in a new energy era -
Kansai Electric Power Group Medium-term Management Plan (2016–2018)
The Kansai Electric Power Co., Inc.April 2016
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The Kansai Electric Power Co., Inc.
1. Introduction
2. What We Aspire to Become in 10 Years
3. Our Efforts towards Realizing What We Aspire to Become(1) Enhancement of competitiveness in comprehensive energy business
(2) Establishment of new pillars for growth
(3) Strengthening Group Management Foundation
4. Financial goal and policy of return to stockholders
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The Kansai Electric Power Co., Inc.
Thank you very much for your continuous support for the business operated by the Kansai Electric Power Group.
For the past 65 years since our founding, our Group has been operating business by “continuously serving our customers and communities,” including
providing a safe and stable supply of electricity, as our mission of primary importance.
The full liberalization of retail electricity sales starting in April 2016 ushers in a new energy era in which the business environment will dramatically
change from a “regional monopoly and fully distributed cost” model which has lasted since the day of the Group’s establishment, to a “free competition”
model.
We are going to enter an age of full-fledged competition with the participation of new rival companies from other industries, while at the same time
expansion of business domain/area resulting from the liberalization will also be an opportunity for us to achieve fresh growth.
Our Group sincerely hopes to keep serving our customers and communities by responding to the rapidly changing environment in a proactive and flexible
manner and by providing our own value not just in conventional ways but with fresh ideas.
To this end, now that we are standing at the turning point of an era, we have formulated our “Management Philosophy” and “Kansai Electric Power Group
Vision” in March 2016, which clearly show how our Group should operate our business under new management circumstances to proactively respond to
the changes and achieve long-term sustainable growth.
Introduction
Under our new philosophy and vision, what should we do to be continuously selected by our customers and bring further
growth to our Group? How should we make our way to become what we aim to be as stated in our vision?
As the first step of the way our Group must proceed, we have now developed the “Kansai Electric Power Group Medium-
term Management Plan (2016–2018)”.
Our determination underlying the Medium-term Management Plan is represented by the word “Challenge.” We
“Challenge” competition, “Challenge” uncharted territory and “Challenge” with fresh ideas; in doing so our Group will
make a concerted effort to meet your expectations.
As the newborn Kansai Electric Power Group, we will accomplish our Medium-term Management Plan with unwavering
resolve and continue to forge ahead toward the growth of our Group in a new energy era.
We ask for your continued support and patronage.
April 2016
Makoto Yagi, President and Director
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The Kansai Electric Power Co., Inc.
Formulation of Medium-term Management Plan
[What we aim to be in the future]
We will provide a wide range of safe,
comfortable and convenient services from a
viewpoint of our customers and business
partners, and gain their trust to be selected as
the best partner in everyday life and business so
we keep growing at home and abroad while
fulfilling our resolve to play expected role as
Japan’s leading company in the energy sector.
By giving top priority to safety and fulfilling social responsibilities as the axis of
business management and upholding our mission of “continuing to serve our
customers and communities,” we at the Kansai Electric Power Group will realize a
bright, affluent future and keep close relationship with our customers and
communities into the future.
Based on the concept of valuing people, the Kansai Electric
Power Group will contribute to sustainable development of
communities through fair business activities.
Each one of our directors and employees will demonstrate a
“sense of mission” and “spirit of challenge” which have been
cultivated so far and give our best in our duties as a good
member of society and also fulfill the following fundamental
responsibilities.
[Fundamental Responsibilities]
•Give top priority to ensuring safety.
•Surely implement CSR.
•Keep changing to accomplish our abiding mission.
.
○While the environment surrounding the electricity business is changing dramatically as exemplified by the full liberalization of retail
electricity sales, business opportunities are expanding owing to full liberalization of retail gas sales and other factors.
○ In order to proactively respond to such environmental changes and realize “What we aim to be in the future” as stated in the “Kansai Electric
Power Group Vision” developed in March 2016, we formulated a new medium-term management plan.
Formulating a medium-term management plan
to achieve fresh growth in a new energy era
Kansai Electric Power Group
Philosophy System
Medium-term
Management Plan
Management
Philosophy
Kansai Electric
Power Group
Vision
Guidelines for
Action
Brand statement
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The Kansai Electric Power Co., Inc.
3-year Steps to Realize What We Aspire to Become
Now
(2016)
After 3 years
(2019)
After 10 yearsAfter 6 years
(2022)
○ “What we aspire to become in 10 years” toward what we aim to be in the future, which is described in the Kansai
Electric Power Group Vision, and “3-year Action Plan” to realize it.
Medium-term Management Plan is…
(Next term)
Medium-term Management Plan
(Term after next)
Medium-term Management Plan
Now
[2016–2018] Expansion of revenue
sources
Establishment of a new
revenue structure[2019–2021]
[2022–2024]
What we aspire to
become in 10 years
Regeneration and pursuit of
fresh growth
(Current term)
Medium-term Management Plan
What we aim to be
in the future
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The Kansai Electric Power Co., Inc.
(Reference) Positioning by Step
[2016–2018]
Expansion of revenue sources
Establishment of a new
revenue structure
[2019–2021]
[2022–2024]
Regeneration and pursuit of
fresh growth
○ Restart of our nuclear power plants as early as possible to fulfill our responsibilities to our
stakeholders, such as lowering electricity rates and resuming dividend payments.
○ Enhancement of competitiveness and firm establishment of a profit-making structure at the
same time.
○ Consider a broad range of approaches toward commercialization and future growth, without
being bound by conventional frameworks.
○ Increase the scale of business and profit level by further enhancing competitiveness through
resumption of successor nuclear reactor operations and implementation of cost structure reform, as
well as by intensively devoting managerial resources to highly profitable businesses.
○ Secure stable profits from multiple revenue sources as the outcome of efforts accumulated so
far.
○ Establish a new business portfolio (revenue structure) that matches the new energy era and does
not solely depend on the electricity business within the Kansai Region, thereby realizing what
we aspire to become.
(Nex
t te
rm)
Med
ium
-ter
m M
anag
emen
t
Pla
n
(Ter
m a
fter
nex
t)
Med
ium
-ter
m M
anag
emen
t
(Cu
rren
t te
rm)
Med
ium
-ter
m
Man
agem
ent
Pla
n
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The Kansai Electric Power Co., Inc.
Our Determination to Move Ahead with the “Medium-term Management Plan”
◇ “Challenge” competition.
Amid full-scale competition resulting from full liberalization of retail electricity sales, we will do our best in every process to deliver our
products and services so customers will select the Kansai Electric Power Group.
◇ “Challenge” uncharted territory.
Actively operate businesses in domains and areas we have not previously entered to achieve growth and expansion beyond the conventional
business framework.
◇ “Challenge” with fresh ideas.
In light of environmental change from a “regional monopoly and fully distributed cost” model to a “free competition” model, we will keep
challenging positively with fresh ideas without being bound by conventional thinking or frameworks.
Challenge. - Toward the growth of the Group in a new energy era -
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The Kansai Electric Power Co., Inc.
1. Introduction
2. What We Aspire to Become in 10 Years
3. Our Efforts towards Realizing What We Aspire to Become(1) Enhancement of competitiveness in comprehensive energy business
(2) Establishment of new pillars for growth
(3) Strengthening Group Management Foundation
4. Financial goal and policy of return to stockholders
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The Kansai Electric Power Co., Inc.
Recognition of Business Environment
○ As the managerial environment changes dramatically from a “regional monopoly and fully distributed cost” model to a “free competition” model
we are entering an era of full-fledged competition.
Since no significant increase of electricity demand can be expected in the domestic market, growth will be limited if we depend solely on the
electricity business within the Kansai Region.
○ Meanwhile, full liberalization of the energy business will allow us to expand our business domain/area including the gas business.
Additionally, overseas energy consumption is on the increase, suggesting growing business opportunities.
◆ As no significant growth of domestic electricity demand can be
expected from now on due mainly to decreasing population, cross-
area competition in the electricity market will get more serious along
with the full liberalization of retail sales.
◆ The gas market will become more competitive as well, lowering
barriers between energy markets.
◆ The world’s energy consumption will increase, keeping pace with
economic growth. In particular, energy consumption in developing
countries will increase notably.
◆ In terms of securing further neutrality of the power transmission and
distribution sector, the power transmission and distribution business
will be legally separated.
◆ Customers/communities’ needs for energy use and supply method,
such as smart communities and demand response, will be further
diversified.
◆ To attain the national goal of global warming gas reduction, the need
for CO2 emission reduction will keep on increasing, promoting
further dissemination of renewable energies.
◆ While further improvement is required for nuclear safety, the
“Strategic Energy Plan” has defined nuclear power as a low-carbon
quasi-domestic energy source and positioned it as an “important
base-load power source” with excellent supply stability and
efficiency.
Changes in the energy market Changes in the needs of customers and communities
Advent of a new energy era and opportunities for fresh growth
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The Kansai Electric Power Co., Inc.
“Management Direction” and “What We Aspire to Become in 10 Years”
1. Become a highly
profitable
business group.
2. Expand business
fields.
3. Build a robust
management base.
Management Direction What We Aspire to Become in 10 Years
○ We have achieved high profitability through realization of an
increase in business efficiency and enhancement of competitiveness,
provision of new products and services, proactive use of alliances,
business activities focused on our competitors’ movements,
profitability and so on.
○ We have established a robust management base which enables agile
and effective response to environmental changes, and have also been
moving forward tirelessly as Japan’s leading company in the energy
sector.
○ Through our efforts to boldly expand our business fields (business
domain/area) without being tied to existing businesses, in pursuit of
fresh growth for our Group, the entire Group has grown into a
business group much larger than it was before the Great East Japan
Earthquake.
“Challenge”
competition.
“Challenge”
uncharted territory.
“Challenge” with
fresh ideas.
Challenge.
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The Kansai Electric Power Co., Inc.
Business Portfolio after 10 Years
With a balanced Group-wide business portfolio,
we aim to achieve ordinary income of at least 300 billion yen.
○We will achieve a Group-wide profit which exceeds the pre-Earthquake level.
○We will expand our business scale through proactive investment in international and Group businesses, thereby creating a balanced Group-wide
business portfolio.
300billion yen or more
Comprehensive energy/Power transmission
and distribution business International/Group
businesses
1
200billion yen
1 : 4
After 10 years (2025)
Before the
Earthquake
1.5 times or more
Investment of 1,500 billion yen in
international/Group businesses over 10 years
: 2
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The Kansai Electric Power Co., Inc.
Breakdown of Business Portfolio after 10 Years
Group Support Business
20 billion yen
300billion yen or more
Comprehensive Energy Business/Power
Transmission and Distribution Business
200 billion yen or more
International Business
30 billion yen
Information and
Communications
Business
30 billion yen
Real Estate/Life Business
30 billion yen
Business portfolio after 10 years
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The Kansai Electric Power Co., Inc.
1. Introduction
2. What We Aspire to Become in 10 Years
3. Our Efforts towards Realizing What We Aspire to Become(1) Enhancement of competitiveness in comprehensive energy business
(2) Establishment of new pillars for growth
(3) Strengthening Group Management Foundation
4. Financial goal and policy of return to stockholders
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The Kansai Electric Power Co., Inc.
Pillars of Approach and Prioritized Measures
1. Become a highly
profitable
business group.
2. Expand business
fields.
3. Build a robust
management base.
Management Direction
“Challenge”
competition.
“Challenge”
uncharted territory.
“Challenge” with
fresh ideas.
(1)Enhancement of competitiveness in
comprehensive energy business
Pillars of Approach and Prioritized Measures
(2)Establishment of new pillars for growth
(3)Strengthening Group Management Foundation
[1] Dramatic growth of international businesses
[2] Further growth of Group businesses
[3] Promotion of innovation to accelerate growth
[1] Promotion of stable transmission and distribution
services
[2] Reform of organization and governance
[3] Strengthening foundation of human resources
[1] Enhancement of marketing and sales strategies
[2] Strengthening of competitiveness in power
supply (realization of a power structure achieving
S + 3E)
[3] Active expansion of the gas business
[4] Active promotion of alliances among operators
[5] Further promotion of reform of cost structure
Challenge
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The Kansai Electric Power Co., Inc.
1. Introduction
2. What We Aspire to Become in 10 Years
3. Our Efforts towards Realizing What We Aspire to Become(1) Enhancement of competitiveness in comprehensive energy business
(2) Establishment of new pillars for growth
(3) Strengthening Group Management Foundation
4. Financial goal and policy of return to stockholders
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The Kansai Electric Power Co., Inc.
(1) Enhancement of competitiveness in comprehensive energy business
○ Significant future growth in demand for electric power cannot be expected due to enhanced awareness of power saving/energy
saving, declining population, etc.
○ Full deregulation of the electricity/gas markets allows competitors from various fields to rush into the energy market, giving
customers’ free choice of a larger number of retailers and intensifying their demand for reduced energy cost.
○ Unpredictable trend of nuclear power plants and input amount of renewable energy.
○ The estimated 2030 percentages of energy mix supply sources are as follows:• Nuclear: 20–22% / coal: 26% / LNG: 27% / oil: 3% / renewables: 22–24%
○Thorough management streamlining to enhance our price competitiveness
○Providing and expanding products and services by making full use of both
the internal and external alliances
○Expansion of the integrated business combining electricity and gas with
the group service.
○Full-scale entry into markets outside the Kansai Region focused on the
metropolitan area.
○ Promotion of efforts towards strengthening of competitiveness to achieve
S+3E.
• Restart of nuclear power plants
• Secure promotion and streamlining of electric power development towards enhanced competitiveness.
• Active development of hydro- and renewable-energy power supplies.
○ Expansion into the home sector.
○ Thorough streamlining to enhance competitiveness.
Dir
ecti
on
of
effo
rts
Enhancement of
marketing &
sales strategies
Strengthening of
competitiveness in
power supply
Active expansion of
the gas business
Further promotion
of reform of cost
structure
Before the
Earthquake
2018 2025
□ Ordinary income(including the power transmission & distribution business)
160billion yen
200billion yen
170billion yen
Recognition
of the
business
environment
○Active promotion of alliances among operators to improve their enterprise
value and solve problems common to operators.
Active promotion of
alliances among
operators
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The Kansai Electric Power Co., Inc.
(1)-[1] Enhancement of marketing and sales strategies
We will restart nuclear power plants and promote thorough streamlining of
management to enhance our price competitiveness and make full use of alliances
to provide and expand products and services.
Hom
e se
ctor
Bu
sin
ess
secto
r
Within the territory Outside the territory
○ Provide a price menu capable of satisfying customers’ needs.• Hapi e-Time • e-Smart 10, etc.
○ Provide value-added services by making full use of the community-based
business base.• Hapi e-Living Support • Run-to-You Service regarding Electricity • Hapi e-Points, etc.
○ Provide the living platform (Hapi e-Miruden) service and enhance the
functions.
○ Promote integrated business by making full use of bundled sales with
electricity and gas (2017.4 - ), as well as utilizing alliances with companies
within and outside of the group to combine their products and services
together. • eo electricity • au electricity, etc.
○ Promote an integrated business by combining electricity/gas supply
service with other group services including utility services.
○ Promote the proposition of optimal energy system operation.
○ Full-scale entry into markets outside the Kansai Region
focusing on the metropolitan area.• Provide a price menu capable of satisfying customers’ needs.
• Business tie-up with other companies, for example an electricity-other product bundled
service.
○ Expand sales activities making full use of new power
sources, etc., around the metropolitan area.
○ Promote an integrated business combining electricity
supply service with other group services including utility
services.
Set our target to 1.0 TWh sales in 10 years
around the metropolitan area.
Co
mm
on
○ Coordinate local/area development through participation in smart communities, etc.
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The Kansai Electric Power Co., Inc.
(1)-[2] Strengthening of competitiveness in power supply(realization of a power structure achieving S + 3E)
Along with the efforts towards the strengthening of competitiveness, we will provide
electricity, for which high safety, energy security, economy, and environmental
conservation are assured, to be the best choice for our customers.
2014 2025
□ Comparison of power output among various
energy sources
Nuclear
○ Make our best efforts for early restart of nuclear power plants, which are
the driver for competitiveness and make full use as the base-load power
source in the future.
• Strive to persistently improve the safety of nuclear power generation to far higher than required by the
regulations.
• Promote efforts to operate the nuclear power business as a private operator in the competitive environment.
• Promote decommissioning of nuclear power plants with both safety and efficiency ensured.
○ Secure promotion and streamlining of the development of electric power
sources to strengthen our competitiveness.
• Promote fuel-conversion work (Aioi Power Plant/Ako Power Plant)
• Develop power supply sources outside the territory by Kanden Energy Solution Co., Ltd.
• Fully streamline operations to become the leader in the industry.
○ Flexibly ensure the demand-supply operation function taking a large
amount of renewable energy input, etc., into consideration.
Hydro-
/renewable
energy
○ Make use of the FIT program and promote streamlining to strengthen the
competitiveness in existing hydro-energy generation and promote new
development.
○ Make use of the FIT program and alliances to actively develop renewable
energy power sources including in areas outside the territory.
ThermalE
ffo
rt in
th
ese t
hre
e yea
rs
Reduced
CO2
○ Promote nuclear power generation, develop renewable energy power
sources, and efficiently operate thermal power plants to reduce CO2
emissions.
0 %
12 %
17 %
46 %
24 %
: Nuclear : Coal : LNG
: Oil : Hydro-/renewal
Early restart for
increase
Active
development for
increase
Promotion of the
development of
power supply sources
to strengthen
competitiveness
taking the demand-
supply balance into
consideration.
Nuclear
Thermal
Hydro-/
renewable
energy
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The Kansai Electric Power Co., Inc.
Efforts towards promotion of nuclear power generation
○ Positioning nuclear power generation in the “Strategic Energy Plan”
Recognition
of the
business
environment
Nuclear power’s energy output per amount of fuel is overwhelmingly large and it can continue producing power for several years only with domestic fuel stockpile.
Nuclear power is an important base-load power source as a low carbon and quasi-domestic energy source, contributing to stability of energy supply-demand structure, on
the major premise of ensuring of its safety, because of the perspectives; 1) superiority in stability of energy supply and efficiency, 2) low and stable operational cost and 3)
free from GHG emissions during operation.
We will make our best efforts to restart four units as early as possible, which is essential to the
recovery of the business base and make full use of them as the important base-load power source in
the future including succeeding units from the standpoint of S + 3E.
○ Make sure to promote, on a company-wide basis, the efforts defined in “Road map depicting the independent and continuous
improvement of safety” (worked out in June 2014), which has been prepared taking into consideration the reflection, lessons, etc.,
associated with Fukushima nuclear accident.
○ Regularly announce the progress of the aforementioned efforts.
Untiring efforts toward
pursuing nuclear safety
Solid action for reactor
decommissioning
Achievement
of early
restart
Eff
ort
in
th
ese t
hre
e y
ears
○ Further enhance timely provision of information and communication activities so that the people in the locations of nuclear power
plants and the social community may understand our efforts to improve the safety of nuclear power generation.
○ Do our utmost to argue and verify that nuclear power generation is safe to promote cancellation of the provisional disposition of
banned restart of the plants.
○ Strive to gain approval for the decommissioning plan and establish a safe and efficient work system.
Enhancement of public
recognition of our efforts
Responses to
lawsuits
Response to new
regulatory
requirements
Refinement of business
environment○ Promote efforts to operate the nuclear power generation business as a private operator in the competitive environment.
○ Prepare for the conformance review for the new regulatory requirements sincerely, rapidly, and accurately.
○ Prepare for the review for operation of power plants aged 40 years or more including Units 1 and 2, Takahama Nuclear Power Plant,
sincerely, rapidly, and accurately.
○ Steadily promote the nuclear fuel cycle, such as the plutonium-thermal type of reactor and immediate nuclear waste storage facility.Promotion of the nuclear fuel
cycle
○ Nuclear energy will amount to an estimated 20 to 22% of the energy mix in 2030.
○ The provisional disposition of the banned restart of Units 3 and 4, Takahama Nuclear Power Plant was decided. (The Otsu District Court:
March 9, 2016)
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The Kansai Electric Power Co., Inc.
(1)-[3] Active expansion of the gas business
We will strive to actively expand the business including entry into the home-use gas
market to double sales.
Business base
Strengthening
of marketing &
sales strategies
○ Improvement of gas consignment infrastructure (new construction of
the facility for adjusting gas calories).
○ Improvement and strengthening of gas/LNG sales by introducing
independent gas supply lines, tank lorries, etc.
○ Training of personnel working on gas sales.
○ Expansion of the integrated business combining electricity/gas supply
service with other group services.
○ Sales tie-up with gas appliance dealers, etc.
Enlargement
of sales target
(2017.4–)
○ Start of entry into the home-use market.
○ Enlargement of the sales target up to the customers in the new range of
deregulated gas 100,000 m3/year in the corporate-use market.
Eff
ort
in
th
ese t
hre
e y
ears
2015 2018 2025
Strive to at least double
current gas sales
□ Gas sales
0.72 million t
1.7 million t
1.0 million t
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The Kansai Electric Power Co., Inc.
(1)-[4] Active promotion of alliances among operators
We will actively promote alliances among operators by making full use of the
individual advantages to improve the company’s value and solve the problems
common to us.
Imp
rov
emen
t of
com
pan
y’s
valu
e
Strategic alliance with Tokyo Gas
○ Promote discussion about strategic alliance with Tokyo Gas in various fields including
fuel procurement, power plant operation/maintenance, power source development, and
joint participation in overseas businesses.
Solu
tion
of
com
mo
n
pro
ble
ms
Alliance involved in nuclear power generation business among operators
○ To further improve the safety and reliability of nuclear power generation and smoothly
operate and develop the nuclear power generation business, we strive to build a
framework, which enables mutual cooperation with Chugoku Electric Power Co. Inc.,
Shikoku Electric Power Co. Inc., and Kyushu Electric Power Co. Inc. by making full use
of the individual properties and knowledge related to nuclear energy and close
geographical proximity.
○ Specifically, we will work cooperatively in the event of a nuclear power plant accident,
decommissioning of a nuclear power plant, and establishment of the facilities for specific
major accidents.
○ As part of a course of efforts:
• “Alliance in LNG procurement” to improve the capability to address changes in demand-supply and market.
• Strive to promote “Alliance in technology for LNG thermal power plant operation and maintenance” to operate them safely and
efficiently.
and achieve a low-cost and stable energy supply through the discussion about the issues in a wider range of fields.
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The Kansai Electric Power Co., Inc.
(1)-[5] Further promotion of reform of cost structure <management streamlining plan>
We will promote thorough streamlining by reforming the cost structure to enhance our
competitiveness.
○ Consideration of power source streamlining based on the correct determination of demand-supply balance
Continuous
promotion of
streamlining
Procurement/
logistics reform
○ Further reduction in cost by achieving industry-leading efficient procurement and expanding procurement reform to
the entire group
○ Further improvement and streamlining of logistics by 3PL(Third-Party Logistics)
○ Offshoring BPO (Dalian, China) of personnel/labor affairs functions
○ Review and integration of responsibilities for indirect management functions among group
companies (accounting, general affairs, information equipment management, company
houses/dormitories management, etc.)
□ (Reference) Business process reforms made so far:
○ Continuation and pursuit of the sustainable efforts made after the Earthquake
• Review the equipment inspection method and construction method
• Correct determination of the timing of repair through the remaining life assessment, etc.
Business process
reform
○ Promotion of business process reform to enhance our competitiveness
• Streamlining of sales tasks including the fee collection task
• Operational reform in thermal power plants, etc.
Eff
ort
in
th
ese
thre
e yea
rs
Further thorough
streamlining
○ Promote the above-mentioned streamlining and increase the revenues for individual businesses to improve productivity (*) by 50% or more by
2025.(*) Ordinary income/employee
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The Kansai Electric Power Co., Inc.
(Reference) Efforts to streamline management made so far <management streamlining plan>
○ From 2013 to 2015, we generally achieved not only the target amounts described in the management streamlining plan which
was issued when two raises in fees were applied, but also the target amounts for management streamlining including the
assessed value suggested by making best efforts as a whole of the group to fully streamline management.
○ In 2016, we will review the existing streamlining policies, employ new construction methods and business operation methods,
as well as strive to reduce the material and equipment costs to thoroughly streamline management.
Efforts for
streamlining
2013 2014 2015Descriptions
Target Result Target Result Target Result
Cost involved in demand-
supply343 445 633 941 914 624
• Combined cycle in the Himeji No.2 Power Plant
• Purchasing of inexpensive electric power from Japan
Electric Power Exchange
Cost of capital investment 86 98 98 103 117 128• Reduced procurement cost
• Review of construction timing and contents
Repair cost 296 470 371 607 370 628• Reduced procurement cost
• Reduced smart meter price
Personnel cost 451 373 453 376 465 490
• Further reduced board members’ and advisors’
compensation
• Reduced basic salary and non-payment of bonus
Overhead 491 446 506 526 489 612• Reduced procurement prices
• Promoted streamlining policies for each cost
Total 1,667 1,833 2,060 2,553 2,355 2,481• All the target amounts for streamlining have been
achieved.
(unit: one hundred million yen)
(Target amount = management streamlining plan + assessed value)
(The total figures are not always correct due to rounding.)
□ Results of 2013 to 2015 management streamlining
23
The Kansai Electric Power Co., Inc.
(Reference) Main streamlining cases <management streamlining plan>
Str
eam
lin
ing c
ase
s
<Fuel conversion>
Fuel conversion in thermal
power plants
Main cases
<Review of specifications>
Newly adopted aluminum
wires
<Review business operation
method>
Outsourcing of printing
work
Efforts
○ The thermal fuel cost has been reduced in Units 1 (start of operation in Sep., 1982)
and 3 (start of operation in Jan., 1983), Aioi Power Plant using natural gas, which
is inexpensive and environmentally-friendly, in addition to heavy oil and crude oil
since 2016.
○ To supply power safely and stably, as well as reduce the material cost, newly-
developed “low-wind-pressure aluminum wires” are used instead of copper
wires.
○ At present, the new wires have been introduced in some areas and will be
expanded in all the areas within the territory starting from 2016.
○ It is expected that the introduction of new wires may reduce wire cost by about
20% (depending on the wire sizes) as streamlined material cost and avoid the
risk of stress-corrosion breakage of wires.
○ Conventionally, we managed and used our own printers internally. At present,
MPS (Management Print Service*2) is used to reduce the total cost associated
with the printing work.
(*2) Without owning printers internally, building and operation of the printing environment is
outsourced.
○ Specifically, the total cost was reduced by optimizing the number of printers and
layout taking the number of printed sheets into consideration, using one supplier
for all the in-house printers, and outsourcing of routine work such as
consumable goods management and procedure for lease/purchase of individual
equipment.
(*1) Since supply stability may be further increased, the specification allowing for the use of heavy and crude
oil is employed even after natural gas becomes available.
Before renewal of facilities After renewal of facilities (2016–)
Rated output 375 thousand kW each 375 thousand kW each
Fuel Heavy oil, crude oil Natural gas, heavy/crude oil*1
24
The Kansai Electric Power Co., Inc.
1. Introduction
2. What We Aspire to Become in 10 Years
3. Our Efforts towards Realizing What We Aspire to Become(1) Enhancement of competitiveness in comprehensive energy business
(2) Establishment of new pillars for growth
(3) Strengthening Group Management Foundation
4. Financial goal and policy of return to stockholders
25
The Kansai Electric Power Co., Inc.
(2)-[1] Dramatic growth of international businesses
We will expand the investment fields and regions to become a leading international
IPP business player in Japan.
○ It is expected that the demand for electric power will continue to largely grow in the developing countries including the countries
in Southeast Asia, Middle East, Latin America, and India.
○ The technological capability for hydro- and thermal-power generation, as well as power transmission and distribution, is our
competitive advantage in expanding our business abroad.
○ It is necessary to strengthen the network with the local governments and companies and train and recruit the human resources who
are skilled in information collection.
Recognition
of business
environment
New
businesses
Business base
○ Strengthening of the capacity of creating and processing businesses to
ensure new businesses
• Tie-up and building alliances with trading houses, etc
• Strengthening of the local network through deployment of overseas offices
○ Expansion of investment fields and regions
(renewable energy, North America/Europe, etc.)
○ Training and recruitment of global human resources who have special
expertise and wealth of experience
Existing
businesses
○ Steady promotion of developing businesses and securement of revenues
from the existing projects
Eff
ort
in
th
ese t
hre
e y
ears2015 2018 2025
3 billion yen
30 billion yen
5 billion yen
□ Profit Target of International Business
About 10,000 ~ 12,000 MW is assumed as a target
for the equity portion as of 2025.
2016-2025
(Ten years)
2016-2018
(Three years)
□ Cumulative Amount of Planned Investment
140billion yen
500billion yen
26
The Kansai Electric Power Co., Inc.
(2)-[2] Further growth of Group businesses <information and communications business>
We will strive to strengthen our customer base and create value-added services to
become an information and communications service provider, who is selected also by
customers outside the Kansai Region.
○ For the FTTH business and corporate line business, the trend toward reduced prices has advanced due to market saturation.
○ The MVNO and Cloud markets have been expanding rapidly.
○ Tie-in sales, for example communications-electricity, are expected to penetrate through the complete deregulation of the electric
power/gas retail markets.
Recognition
of Business
environment
2015 2018 2025
170 billion yen270 billion yen
220 billion yen
□ Direct sales
2016-2025
(Ten years)
2016-2018
(Three years)160billion yen
500billion yen
FTTH
Business
sector
○Development of new businesses by making full use of our
customer base
○Reform of the business structure focusing on solutions and
strengthening of marketing outside the territory
MVNO
Energy
○ To be classified in the top-share group, intensive input of
operational resources and strengthening of promotion activities
○ Expansion of tie-in sales of electricity and gas for FTTH users
Common○ Expansion of new businesses through alliances and the creation
of value-added services
Exis
tin
g b
usi
nes
ses
New
bu
sin
esse
s
Eff
ort
in
th
ese t
hre
e y
ears
2015 2018 2025
□ Ordinary income
15 billion yen
30 billion yen
16 billion yen
□ Cumulative Amount of Planned Investment
27
The Kansai Electric Power Co., Inc.
(2)-[2] Further growth of Group businesses <real estate business>
We will actively expand our businesses as a comprehensive real estate business group
meeting the needs for real-estate in metropolitan areas, as well as in the Kansai
Region.
○ For the housing market, it is estimated that the number of newly-built houses has reached its peak as the number of households
approaches its peak, while the trading of used houses has gained momentum.
○ The rental office market has hit a plateau in the Kansai Region due to reduction in the working-age population and continued
heavy concentration in Tokyo.
Recognition
of business
environment
2015 2018 2025
90 billion yen
150 billion yen
100 billion yen
□ Direct sales
2016-2025
(Ten years)
2016-2018
(Three years)150billion yen
500billion yen
2015 2018 2025
□ Ordinary income
11 billion yen
30 billion yen
15 billion yen
Housing
business
(house and lot)
Lease
business
○ Active expansion of the business in metropolitan areas based on the
Kansai Region by strengthening the brand strength, etc.
○ Steady expansion of the business throughout Japan, as well as in the
Kansai and Metropolitan areas by ensuring sites suitable for business
and excellent properties.
Investment/
development
business
Others
○ Well-balanced expansion of the business by combining rental/sales/fee
businesses.
○ Development of complex construction projects including
offices/houses/hotels/shopping centers, etc.
○ Enter into the stock-related markets (reform of used houses, renovation,
etc.)
○ Steady scale expansion of office buildings and apartment custodial
services
Eff
ort
in
th
ese t
hre
e y
ears
* The figures listed above include those of the business related to living.
□ Cumulative Amount of Planned Investment
28
The Kansai Electric Power Co., Inc.
(2)-[3] Promotion of innovation to accelerate growth
We will make novel efforts not seen in the existing ones to realize What we aspire to
become in 10 years to actively and resolutely challenge new businesses and the
development of new products/services.
○ Electricity business
focusing on the
improvement of
existing products and
services
○ Group businesses
make effective use of
our know-how and
properties
ConventionallyEstablishment of the group-original
innovation promotion scheme
Pursuit of all the possibilities towards
innovation promotion
What we aspire
to become in 10
years
Expansion of
revenue sources
Establishment of a new
revenue structure
Regeneration and pursuit of the possibility
of fresh growth
Making use of the most-
advanced technology and
develop a new business model
Creating the framework for
innovation promotion
Making active use of external
ideas and resources
Taking an inventory of
cultivated strengths
○ Discovery and collection of seeds of new businesses, etc., in the group
○ Building of a network with other companies for making full use of external ideas and
resources to improve the required time and quality for development
○ Building of a business model to achieve a new type of growth different from the
existing one
○ Establishment of an innovation promotion organization, expansion of an in-group
innovation network, and sharing of group resources
○ Efforts to train and ensure the human resources responsible for innovation
• Utilize energy technology including distributed
power sources, batteries, and hydrogen-power
• Expansion of the use of biomass energy
• Making full use of IoT, AI, and sensor technology
• Better relationship with our customers and the communities to listen to various
opinions
• Technology related to electrification (heat pumps, etc.)
• Design of energy-supply facilities and know-how of maintenance/operation of
them
• Knowledge and know-how cultivated by the group businesses
Exam
ple
s of
stre
ngth
s
Exam
ple
s of
tech
nolo
gy
Exam
ple
s of
mod
els
• With the widespread use of electric cars,
entry into their peripheral businesses, such
as power-supply stands
• Monetization of demand response
and energy-saving trade
29
The Kansai Electric Power Co., Inc.
1. Introduction
2. What We Aspire to Become in 10 Years
3. Our Efforts towards Realizing What We Aspire to Become(1) Enhancement of competitiveness in comprehensive energy business
(2) Establishment of new pillars for growth
(3) Strengthening Group Management Foundation
4. Financial goal and policy of return to stockholders
30
The Kansai Electric Power Co., Inc.
(3)-[1] Promotion of stable transmission and distribution services
As a leader of the social foundation, we try to provide new services by utilizing our
technology and know-how, as well as supplying electric power at a low price safely
and stably to contribute to communities.
○ Introduction of license system associated with electricity system reform, full liberalization of electricity retail and legal structural
separation(Security of neutrality and fairness, security of coordination for safe and stable power supply, duty of ultimate secure supply)
○ Development of facilities’ high aging
○ Major expansion of demand for power supplied by our transmission and distribution facilities(*) cannot be expected due to energy-
saving, population decrease, and popularization and expansion of regenerated energy and private power generation
Recognition
of business
environment
(*) Demand for electric power in the entire Kansai Region supplied by our
transmission and distribution facilities
Base field
Growing
field
○ Safe and stable supply of electric power and meeting
customers’ needs• Supply of appropriate transmission and distribution services on the premise of secured
neutrality
• Steady implementation of countermeasures for high aged facilities by utilizing
sensors and diagnosis technologies
• Restructure of transmission and distribution network for improvement in utilization
rate of facilities
• Promotion of access to streamlining services
• Promotion of smart use of power system corresponding to popularization of
regenerated energy
• Expansion of smart meter introduction
○ Effort to meet demand for electric power supplied by
transmission and distribution facilities and challenge to
provide new services• Sending accessible system information to society
• Increase in overseas transmission and distribution business consulting
• Advancement of transmission and distribution network utilizing storage batteries
Eff
ort
in
th
ese t
hre
e y
ears
Corporate culture of safety and
reform
Safe and stable supply
Meeting customers needs
Our business foundation
Electric utility field
Provision of new services
New business fields
Sound financial strength
High quality electric power is kept to be
supplied safely and stably for
customers’ use with a feeling of trust.
All needs including pursuing lower prices
are satisfied for customer satisfaction.
Sense of mission is developed with
prioritizing safety, and keeping the challenge
to reform actively in the workplace with feel
of growth.
Appropriate interests are secured and financial
strength is improved to continue stable business
toward a clear financial goal.
Making effort to provide new services for
further growth.
Duty of a sensible member of society is
fulfilled to contribute to local
communities.
Contributing to local
communities
□ Vision of transmission and distribution services
31
The Kansai Electric Power Co., Inc.
(3)-[2] Reform of organization and governance
Actively promoting medium-term management plan for construction of organization
and governance system allowing maximized group value.
○ To realize “What we aspire to be in 10 years” and to build a system for maximizing group value, we will revise our management system from the
current system centered on the electricity business to a new system aiming at the comprehensive growth of the entire group in June, 2016.
○ Specifically, the top management and staff organization are defined as the “Group Head Office” to strengthen group management as well as to
define companies operating the business of the pillar of growth [Transmission and distribution (after legally separated), Kanden Energy Solution
Co., Inc., K-Opticom Corporation, Kanden Realty & Development Co., Ltd.] as the “Core company” to build a system materializing the high
profitability of the entire group.
* The chart below shows the image in case the transmission and distribution business is owned by the operating-holding company after the legal unbundling.
□ Image of future organization and governance system
Group Head Office
Comprehensive
energyInternational
Transmission
and distribution•••
~~
Comprehensive
energy
(Kanden Energy
Solution)
Information and
communications(K-Opticom)
Real estate(Kanden Realty &
Development )
Group
companies
Kansai Electric Power Co., Inc.
Core companies
32
The Kansai Electric Power Co., Inc.
(3)-[3] Strengthening foundation of human resources
Promoting reform, strengthening the foundation of human resources suitable for the
new energy era and establishing a new corporate culture
○ Fostering an organization and human resources able to compete in the new era with the two wheels of “Speciality” and “Diversity”
○ Switching to a “Strong and flexible corporate culture” to promote challenge for materialization of further growth
○To improve competitiveness and productivity, the entire group promotes the fostering and deployment of human
resources to increase the skills and abilities of human resources.(Securing highly specialized human resources, promoting activities in new fields such as international business and group business)
○ Further improvement in personnel and wage system for employees
“Human resources”
reform
“Way of working”
reform
Diversity promotion
○ Realizing highly productive working in a manner with well-modulated on/off by “Arranging comfortable work
environments” and “Reforming sense of efficient use of time”
○ Developing a competitive corporate group allowing creation of new value by respecting “Differences” in each person,
and strengthening the organization by varied sense of values and ideas
○ Realizing way of work enabling people to use their abilities to the maximum regardless of their sex and age
Corporate culture
reform
○ Clarifying the important sense of values and behavior patterns and promoting reform to aim for a “Strong and
flexible corporate culture”
[Targets for further active participation of females]
◆ By the end of FY 2020, the ratio of females in managerial positions shall be double that of FY 2013.
◆ Ratio of females recruited for office work shall be at least 40%.
Eff
ort
in
th
ese t
hre
e yea
rs
33
The Kansai Electric Power Co., Inc.
1. Introduction
2. What We Aspire to Become in 10 Years
3. Our Efforts towards Realizing What We Aspire to Become(1) Enhancement of competitiveness in comprehensive energy business
(2) Establishment of new pillars for growth
(3) Strengthening Group Management Foundation
4. Financial goal and policy of return to stockholders
34
The Kansai Electric Power Co., Inc.
Financial goal and policy of return to stockholders
□ Financial goals [Consolidated base]
□ Policy of return to stockholders
Our policy of return to stockholders is to secure sound financial strength and maintain stable dividends in order to distribute
surplus to all stockholders appropriately as the Kansai Electric Power group.
Item 2018 fiscal year (3 years later) 2025 fiscal year (10 years later)
Ordinary profit 200 billion Yen 300 billion Yen
Capital-to-asset ratio Approx. 20% Approx. 30%
ROA Approx. 3.5% Approx. 4%
Currently, we are making efforts to restart our nuclear power plants and streamline management for the early resumption of
dividends.
(*)
(*) Business profit [Ordinary profit + Interest expense] ÷ Total assets [Average of beginning and end of term]