1
JGC Corporation
Hideo MasudaVice Chairman and CFO
January 2008
Engineering for the Quality of Human lifeEngineering for the Quality of Human life
CONTENTS
Settlement of AccountsTransition of Operation incomeBusiness Fields -New Contracts by Business fieldJGC’s Trends in Orders ReceivedSummary of Outstanding ContractsMarket Environment OutlookMarket Environment Changes Affecting Contractors Focused Regions and SectorsTarget Management FiguresNon-EPC business strategy – Catalysts & chemical products
Segment Information – by Business segment
Non-EPC business strategy – Enterprise investment
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101112
2
301.34
20.18(3.3)
26.41(4.3)
43.92(7.2)
608.52
March 31, 2007 (%)
807.64
15.01(2.7)
20.38(3.7)
36.23(6.6)
550.30
March 31, 2006 (%)
469.53
11.58(2.7)
13.22(3.0)
28.29(6.5)
435.19
March 31, 2005 (%)
540.00New contracts
43.00(7.7)
Operating income
560.00Net sales
26.50(4.7)
Net income
63.00(11.3)
Gross profit
March 31, 2008 (exp.) (%)
(Billions of yen)
1 Settlement of Accounts
2 Transition of Operating income
FY2005 FY2006 FY2007FY2004
13.2 billion Yen
20.3 billion Yen
26.4 billion Yen
43.0 billion Yen
3
0 100,000 200,000 300,000 400,000 500,000 600,000
2007
2006
2005
2004
2003
■ Oil & Gas Development
■ Petroleum Refining
■ LNG
■ Chemical
■ Power Generation,Nuclear Power, New Energy
■ Living and General Production
■ Environmental Protection,Social Development and IT
■ Others
FiscalYear
Millions of Yen
Forecast : 540,000
3 Business Fields – New Contracts by Business field
FY2003-04
480 billion Yen(average)
FY2005-06
550 billion Yen(average)
FY2007-08
570 billion Yen(average)
Steady Increase towards the goal ofJGC mid-term management plan
4 JGC’s Trends in Orders Received
4
▲272.1FY2005 FY20061,024.3 752.2
(Unit : Billions of Yen)
by Business sector by Business sector by Regionby Region
5 Summary of Outstanding Contracts
FY2005 FY2006 FY2005 FY2006
Oil & gas development
211.0
Petroleum refining245.0
LNG187.5
Chemical296.5
Others 84.1
106.7 (14.2%)
204.0 (27.1%)
133.2 (17.7%)
187.4 (24.9%)
120.6 (16.0%)
Japan207.7
Asia176.8
Africa 47.4
Middle East589.5
Others 2.7
240.7 (32.0%)
156.3 (20.8%)
327.1 (43.5%)
4.0 (0.5%)
23.8 (3.2%)
6 Market Environment Outlook
World forecast for 2008: US$54 billion to be spent onoil, gas, and petrochemical facilities,
representing a 9% year-on-year increase ($49.8 billion in 2007)
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 periodset the figure at $200 billion.)
Source: Hydrocarbon Processing, Market Data2008
Source: Middle East Economic Survey, API CORP research
5
7-1 Market Environment Changes Affecting Contractors
2004 – 2006
Chronic supply shortages continued due to the shortfallIn the capacities of equipment vendors,and more seriously, materiel suppliers.
Capacities ofcontractors
Number of projectsby Clients
Capacities ofvendors &
subcontractors
Supplycapacity
・Manufactures・Skilled labor・Construction equipment
makers
7-2 Market Environment Changes Affecting Contractors
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
2007 and beyond
6
7-3 Market Environment Changes Affecting Contractors
Actual and estimated level of labor needed for constructionin the Middle East
These figures will level off because investment in planned projects will be delayed.
However, the levels will remain high
* Data from JGC sources2004 2007
Actual volume
2010
Estimate for 2007
Required laborvolume
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 focusedon the same sectors.
Total value for the focused projects: 1 trillion yen level
・Middle East・Africa・Asia・Japan
・Middle East・Africa・Asia・Japan
Oil Refineries, Gas/Oil related and PetrochemicalsLNG and Gas relatedLNG and Oil RefineriesOil Refineries, Petrochemicals and others
7
JGC Group Scenario 2010 : New Medium-Term Management Plan
550 billion yen
15 billion yen
25%
11 yen
9.3%
600 billion yen
30 billion yen
25%
23 yen
11.0% or more
600 billion yen
30 billion yen
25%
23 yen
11.0% or more
Net Sales
Net Income
Dividend PayoutRatio
Annual DividendPer Share
ROE
(non-consolidated)
End of Fiscal 2005 End of Fiscal 2010 (Goal)
(non-consolidated)
9 Target Management Figures
8
- 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
Enhance fine chemicals businessthat uses nanotechnology
Conductive CoatLiquid
Titania Sol
Insulating CoatLiquid
Increasing revenue to 50 billion Yen in FY2010
10 Non-EPC business strategy – Catalysts & chemical products
550.3〔5%〕
29.4
〔95%〕
520.8FY2005
〔%〕
Catalysts and fine chemical
products
〔%〕
Total engineering
608.5〔6%〕
35.0
〔94%〕
573.4FY2006
+58.2
+5.6
+52.6Difference
〔20%〕〔22%〕
〔80%〕〔78%〕
FY2005
+6.020.326.4
+1.54.15.6
+4.416.220.7DifferenceFY2006 (Unit : Billions of Yen)
Operating incomeOperating incomeNet salesNet sales
11 Segment Information – by Business segment
573.4 520.8
35.0 29.4
20.7
5.6
16.2
4.1
0200400600800
FY2006 FY2005 FY2006 FY2005
Net sales Operating income
0.05.010.015.020.025.0
Total engineering Catalysts and Fine Chemical Products
9
Water & Power Generation - Saudi Arabia
Water & Power Generation – U.A.E.
Construction proceeding smoothly for the completion in mid-2008
Water & Power facilities under construction (Saudi Arabia)
Existing Water & Power facilities (U.A.E.)
Construction proceeding smoothly for the completion in mid-2008
Existing facilities performing well.
12-1 Non-EPC business strategy – Enterprise investment [1]
Environment Business
Juhua chemical plant (China)
Rig in operation
Resource development business
Acquired interest in more small oil & gas fields in Mexico; will continue along same lines
Juhua CDM received first CERin December 2006.Other projects also in progress
12-2 Non-EPC business strategy – Enterprise investment [2]
10
JGC Corporation
Hideo MasudaVice Chairman and CFO
January 2008
Engineering for the Quality of Human life
for Reference
2005 FY 20102006 2007 2008 2009
400
500
600
650
Billionyen
490490
540540
560560580580
600600
520520
600600
550550
1 Expected Growth of Net Sales
560560
11
2005 FY 20102006 2007 2008 2009
10
20
30
40
1212
1818
2121
24242727
3030
2020
1515
Billionyen
2 Expected Growth of Net Income
2626
40 billion yenTarget IRR : 12% or more
40 billion yenTarget IRR : 12% or more
1. Investing in Enterprises
Focusing on M&A for expansion of core business
2. E&C Business
On the Basis of a Secure Financial FoundationOn the Basis of a Secure Financial Foundation
From 2010 onward, recovery of investmentFrom 2010 onward, recovery of investment
3 Investment Planning
12
■ Trains : 31 (31.6% of world total)
■ Production : 90 million tons (35.9% of world total)
■ Trains : 31 (31.6% of world total)
■ Production : 90 million tons (35.9% of world total)
Egypt5,000,000 T/Y, 1 train
Nigeria2,950,000 T/Y, 3 trains4,000,000 T/Y, 3 trains
Brunei1,440,000 T/Y, 5 trains
Qatar3,300,000 T/Y, 2 trains
Indonesia1,500,000 T/Y, 1 train3,800,000 T/Y, 2 train
Australia2,430,000 T/Y, 3 trains4,200,000 T/Y, 1 train
Malaysia2,530,000 T/Y, 3 trains2,650,000 T/Y, 3 trains3,870,000 T/Y, 2 trains
Yemen3,350,000 T/Y, 2 trains
4 LNG Plant Construction Projects
117
2006Actual
2020Forecast
14
America
94
Europe
42
168
Asia
99
2006Actual
2020Forecast
2006Actual
2020Forecast
(million tons/year)
World LNG consumption in 2006: 155 million tonsEstimated demand in 2020: 379 million tons
Need to add facilities to meet needs for 10 million tons/yearproduction increases annually over next 15 years
Source: IEEJ Asia/world Energy Outlook 2006BP statistical review 2007
5 Outlook for World LNG Demand
13
Egypt- SEGAS LNG T2- Iduku LNG T3
Trinidad & Tobago- Atlantic LNG T5
Australia- Gorgon LNG- Sunrise LNG- Pilbara LNG- Browse LNG- Ichthys LNG
Malaysia- Malaysia LNG T9
Iran- Pars LNG- Persian LNG- Iran LNG
Russia- Schtokman LNG- Baltic LNG
EquatorialGuinea- LNG T2
*Red indicates projects in which JGC provided FEED and/or EPC for existing facilities
Venezuela- Deltana CaribeLNG
Nigeria- OK LNG- Nigeria LNG 7 Plus- Brass LNG
JGC has been involved in many of these projects
Algeria- Arzew LNG
6 Planned LNG Projects
Papua New Guinea- Papua New Guinea LNG
Indonesia-Tangguh LNG T3-Donggi-SenoroLNG-Masela LNG
Lybya- Marsa al-BregaLNG
Equatorial GuineaLNG
U.A.E.Gas ProcessingIntegrated Gas DevelopmentGasoline & AromaticsRefineryGas Compression
QatarRefineryGas ProcessingQP/Honam Petrochemical ComplexQP/ExxonMobil Petrochemical ComplexShell Petrochemical Complex
AlgeriaArzew LNGGas DevelopmentOil & Gas DevelopmentGAS ProcessingOil Field DevelopmentRefineryLPGPetrochemical ComplexOil Recovery Facility
OmanBitumenRefinery & Petrochemical ComplexOil Development
BahrainLube Base Oil
Saudi ArabiaDomestic RefineryYanbu Export RefineryJubail Export RefineryRas Tanura Refinery & Petrochemical ComplexGas & Oil SeparationEthylene ComplexGas Field Development
IranIran LNGPars LNGPersian LNGGas ProcessingRefinery Expansion &
ModernizationPetrochemical ComplexOil & Gas DevelopmentOil Field UpgradeExtra Heavy Oil Refinery
LibyaGas PipelineGas & Oil SeparationRefineryGas DevelopmentLNG
NigeriaBrass LNGOK LNGNigeria LNGGTL ExpansionGas & Oil SeparationFPSOGas Development
AngolaRefineryFPSOOffshore Oil & Gas Development
EgyptSegas LNG 2nd TrainIduku LNG 3rd TrainPetrochemical ComplexRefinery
KuwaitRefineryRefinery UpgradeGas Processing
7 Projects Planned - Middle East and AfricaIraqRefineryRefinery UpgradeGas ProcessingOil & Gas Development
14
IndonesiaTangguh LNG T3Donggi-Senoro LNGMasela LNGRefineryOil Development
TaiwanLube Base OilRefineryEthylene
AustraliaGorgon LNGICHTHYS LNGPluto LNGPilbara LNGBrowse LNGSunrise LNG
SingaporeRefinery Upgrading
MalaysiaMLNG T3 DebottleneckingMLNG T9Lube Base OilRefinery DebottleneckingPetronas/PSR RefineryExport Refinery
ThailandThai Oil RefineryBangchak RefineryNPC/PTT RefineryRefinery ExpansionRefinery UpgradingAromatics
VietnamNghi Son RefineryLon Son RefineryPetrochemical
8 Projects Planned - Asia and Oceania
Papua New GuineaLNG
FY2005
7,000 employees
Japan3,700
Overseas3,300
March 2007
8,200 employees
Japan4,200
Overseas4,000
FY2010
8,500 employees
Japan4,200名
Overseas4,300
Continuous increase of manpower resources
Being increased ahead of schedule
Target for Mid-term Management plan
9 EPC Business Strategy
15
Japan
Africa
Asia
Middle East
Oceania
North & Central South America
0.4% 0.1%
32.0%
3.2%
20.8%
43.5%
Total ¥752 billionTotal ¥752 billionas of end of March 2007
10 Outstanding Contracts as Percentage by Business Region
100%
06 12 18 24 30 36months
20%
80%
100%
Co
nst
ructi
on
P
rogre
ss
Time Schedule
Prog
ress
11 Progress Image
16
BOUYGUES ( France )5STRABAG ( Austria )4
VINCI ( France )3SKANSKA ( Sweden )2HOCHTIEF ( Germany )1
JGC15CHIYODA16
KAJIMA23
authority: ENR 20 Aug. 2007 The Top International Contractors
Over All RANK
JGC4CCC ( Greece )Consolidated Contractors Int’l Co. Sal
5
FLUOR ( U.S.A. )3BECHTEL ( U.S.A. )2TECHNIP ( France )1
Industrial / Petroleum
12 Top International Contractors in 2006Contracting Revenue from project outside home country
24 TAISEI
80100120140160180200220240260280300320340360380400420440
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t Ind
ex
CS Hot-Rolled Plate CS Structural Steel SS Hot-Rolled Plate (SS304)
CS Hot-Rolled Plate
CS Structural Steel
SS Hot-Rolled Plate (SS304)
Source: MEPS (International)
13 Steel Cost Trend
17
Sol/gel Preparation TechnologyNanoparticle
Alignment
Technology
Thin-film Preparation
Technology
De-NOx Catalyst
Anti-bacterial Agent
LCD-related Materials
EnvironmentalProtection
Conductive Materials
SemiconductorDisplay Materials
Optical
Materia
ls
Cosmeti
c Mate
rials
Mem
ory
Mat
eria
ls
Silic
a/Al
umin
a So
lFCC Catalyst
Zeolite
Direct Desulfurization Catalyst
Indirect Desulfurization Catalyst
ZSM-5
VCM Synthesizing Catalyst
Petrochemistry
Oil Refining
CatalystBusiness Fine
ChemicalBusiness
Colloidal Anti-Bacterial Agent
Ultra-precise Silica Particles
Carrier Tape
Insulating Coat Liquid
Conductive Coat Liquid
Insulating PlanarizationMaterial for Semiconductors
CRT Surface Coat Material
Titania Sol
Hard Coat for Plastic LensesUltra-FineSilica
UV Block/Soft Focus MaterialsVideo Tape Filler
OrganicSolvent Sol
Alcohol Flocculant
Precision Cast BinderGasoline
Heavy Oil
Kerosene, Diesel
Poly Vinyl Chloride
materialsrelated
NewBusiness
14 Main Products Catalysts & Chemical Industries Co., Ltd.
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