chubu electric power company group annual …...new growth ˜elds previous goal achieved the goal...
TRANSCRIPT
Group companies
Following on from integration of the thermal power generation business into JERA in April 2019, we are slated to split off from the power transmission and distribution and sales divisions by April 2020. By having each business operate independently, we will steadily implement the four priority measures and realize sustainable growth for the Group.
New business structure
Business goal (consolidated ordinary income)
Aiming to become a total energy service corporate group that is one step ahead—Setting new business goals toward realization of our management vision—
Consolidated ordinary income was around 163 billion yen in �scal 2018 (excluding the time-lag impact of accrued income incurred by the fuel cost adjustment system). With this result, we have achieved the business goal we have been working toward (150 billion yen or more by �scal 2018). In “the Fiscal 2019 Initiatives to Address Management Challenges,” we have set a new business goal (consolidated ordinary income of 170 billion yen or more by FY2021) as a milestone on the way to realization of the vision we aim to realize that is stated in our management vision (consolidated ordinary income of 250 billion yen or more in the second half of 2020s) and have also shown concrete actions to be taken to achieve these goals. By acting without fail to implement these initiatives, we will advance toward “Putting the New Business Model into Actual Practice.”
Management vision
Second half of the 2020s(the vision we aim to realize)
Realize sustainable growth
Power generationand sales
Group companies
Powertransmission/ distribution
Overseas energybusinesses
New growth�elds
Previous goal
Achieved the goal
FY2018 FY2021 2020s
New goal
FY2021
Sustainable growth toward realization of our management vision
• Business model that separates power generation from sales to maximize energy business income• Further strengthen our resilience• Commercialize new growth �elds and increase income• Address social responsibility (ESG management, SDGs)
Results (FY2016–FY2018)
• Expanded sales area and services• Realized stable supply of electric power• Developed organizational structure• Thoroughgoing improvement in management ef�ciency• Formation of global value chain by JERA
Strengthen business base for growth
JERA
1:4 1:1Construction of a balanced business portfolio
JERA
Group companies
JERA
April 2019 April 2020
by FY2018
billion yenor more150 billion yen
or more250billion yenor more170Achieved
Chubu Electric Power Group
Power NetworkCompany
Power transmission/distribution business company
Customer Service &Sales Company
Retail electric powerbusiness company
Nuclear power
Renewable energy
Corporate planning and strategy, Business development,
Research and development, etc.
Nuclear power
Renewable energy
Split off
Split off
:New growth �eldsOverseas energybusinesses, etc.
Domestic energybusiness
:Overseas energy businesses, etc.
Domestic energybusiness
Second halfof the
Corporate planning and strategy, Business development,
Research and development, etc.
19
Feature 1
Group companies
Following on from integration of the thermal power generation business into JERA in April 2019, we are slated to split off from the power transmission and distribution and sales divisions by April 2020. By having each business operate independently, we will steadily implement the four priority measures and realize sustainable growth for the Group.
New business structure
Business goal (consolidated ordinary income)
Aiming to become a total energy service corporate group that is one step ahead—Setting new business goals toward realization of our management vision—
Consolidated ordinary income was around 163 billion yen in �scal 2018 (excluding the time-lag impact of accrued income incurred by the fuel cost adjustment system). With this result, we have achieved the business goal we have been working toward (150 billion yen or more by �scal 2018). In “the Fiscal 2019 Initiatives to Address Management Challenges,” we have set a new business goal (consolidated ordinary income of 170 billion yen or more by FY2021) as a milestone on the way to realization of the vision we aim to realize that is stated in our management vision (consolidated ordinary income of 250 billion yen or more in the second half of 2020s) and have also shown concrete actions to be taken to achieve these goals. By acting without fail to implement these initiatives, we will advance toward “Putting the New Business Model into Actual Practice.”
Management vision
Second half of the 2020s(the vision we aim to realize)
Realize sustainable growth
Power generationand sales
Group companies
Powertransmission/ distribution
Overseas energybusinesses
New growth�elds
Previous goal
Achieved the goal
FY2018 FY2021 2020s
New goal
FY2021
Sustainable growth toward realization of our management vision
• Business model that separates power generation from sales to maximize energy business income• Further strengthen our resilience• Commercialize new growth �elds and increase income• Address social responsibility (ESG management, SDGs)
Results (FY2016–FY2018)
• Expanded sales area and services• Realized stable supply of electric power• Developed organizational structure• Thoroughgoing improvement in management ef�ciency• Formation of global value chain by JERA
Strengthen business base for growth
JERA
1:4 1:1Construction of a balanced business portfolio
JERA
Group companies
JERA
April 2019 April 2020
by FY2018
billion yenor more150 billion yen
or more250billion yenor more170Achieved
Chubu Electric Power Group
Power NetworkCompany
Power transmission/distribution business company
Customer Service &Sales Company
Retail electric powerbusiness company
Nuclear power
Renewable energy
Corporate planning and strategy, Business development,
Research and development, etc.
Nuclear power
Renewable energy
Split off
Split off
:New growth �eldsOverseas energybusinesses, etc.
Domestic energybusiness
:Overseas energy businesses, etc.
Domestic energybusiness
Second halfof the
Corporate planning and strategy, Business development,
Research and development, etc.
Four Priority Measures (Speci�c Actions)
Strengthening our business base for growth and achieving sustainable growth3Provide services that continue to be chosen by customersSales
Accelerate commercialization in new growth fields4Provide new forms of community through the creation of Community Support InfrastructureNew Growth
Stable power supply for a new age2Assure quality of electric power and strengthen resiliencePower Network
See page 39
See page 35
See page 37
See page 33
See page 29
See page 22
See page 45
See page 23
Improving safety further at Hamaoka Nuclear Power Plant1Continue measures aiming for a safer, more reliable power plantNuclear
Improve energy self-suf�ciency and realize a low-carbon societyRenewable Energy
Increase our corporate value through management of the entire value chainJERA
Overseas deployment of utility business and clean energy businessOverseas Business
Deepen business management in light of ESG and realize sustainable growth while improving our corporate valueESG
Chubu Electric Power Company Group Integrated Report 2019 20
Aiming to become a total energy service corporate group that is one step ahead—Setting new business goals toward realization of our management vision—
We will quickly and steadily implement measures to further increase
safety at our facilities, including the Hamaoka Nuclear Power Plant. We
will also keep steadily investing in equipment needed for stable supply
while continuing to streamline. When making investments, we will
thoroughly ensure ef�ciency.
In order to make sustainable growth a certainty into the future, we will
conduct appropriate risk management, and on that basis engage in
strategic investment for business growth and development.
We envision a 7% or higher ROE level when we
achieve the �scal 2021 business goal. For the
medium- to long-term ROE level, we will aim for a
level that exceeds the cost of capital while closely
monitoring the necessary shareholders’ equity ratio
and other such factors.
Chubu Electric Power Group will continue to invest in
plants and equipment for a safe and stable supply of
electricity as well as in growth sectors to maintain
sustainable growth and improve our corporate value.
Providing strong shareholder returns is an important
mission for our Group. We will continue to pursue stable
dividends, and consider our pro�t growth. Our target
consolidated payout ratio is over 30%.
Growth �eldsBasic conceptual approach to investment and capital policy
ROE
% or higher7Level when the �scal 2021business goal is achieved
Consolidatedpayout ratio
% or higher30
[5-year total up to �scal 2023]
billion yenor more300
billion yen100billion yen100billion yen100
Renewable energy:
Overseas business:
New growth:
Renewable energy• As to renewable energy, we have declared the goal of new
development of 2 GW or more (up to around 2030). In order to accelerate this initiative, we established the Renewable Energy Company in April 2019.
• We will collaborate with various corporations with a view to realizing a low-carbon society, working to develop and popularize domestic renewable energy power sources by participating in investment funds and related activities. We will additionally engage in implementation and support for the model of local production for local consumption and other such activities at the regional level.
Overseas businesses Engage in business centered in Europe, North America, and Southeast Asia
Using its own resources (electric power grid, sales and solutions, renewable energy generation), Chubu Electric Power will aim to provide new community services that contribute to the resolution of social issues in every country and region, as we do in Japan, with a focus on Utility business that supports local communities by providing stable, affordable public infrastructure services and Clean energy business that contributes to global realization of a low-carbon society
New GrowthIn order to support the vision for society as it changes toward a human-centered smart society (Society 5.0), Chubu Electric Power will provide new forms of community by taking the resolution of social issues as a point of departure and bringing about the precise inclusion of technological innovation (Industry 4.0) together with the evolution of conventional energy infrastructure into Community Support Infrastructure (Utility 3.0).
Strengths cultivated in the energy business• Connections and relationships of trust with customers• Knowledge of building and operating electricity infrastructure• Energy-saving and CO2 reduction proposals based on optimal use of energy that
leverage our technical capabilities and proposal capabilities
Services to raise the quality of life of individuals by using various data
Community services based on connecting and evolving several kinds of social infrastructure
Necessary investmentin electric power safety
and stable supply
Strategic investment in growth �elds
Ef�ciency indicator (ROE)
Shareholder return policy
Submarine power transmission business for offshore wind power plants
Investment business, incubation, human asset development
Power distribution/electricity retail business
Expansion throughM&As and alliances
Expansion throughM&As and alliances
Country Project (Business in operation)
Europe
Asia
Africa Paci�c Central and South America
Middle East
North America
Germany
Singapore
Philippines
Electric power company: Utility 3.0
Evolution of the energy industry by means of social change and technological innovation
New growth fields
Around 2030As of December 2017(including Group companies)
Installed capacity
Biomass 0.007
Wind power 0.172
Solar power 0.292
Hydro power 2.143
2.61 GW2.56 GW
2 GW or moreof new development
(excluding pumped storage)
As of December 2018(including Group companies)
Human-centered smart society Greater efficiency and customizationby means of AI and IoT
Society: Society 5.0 Industry: Industry 4.0
Resolving social issues(from perspective of needs)
Technological innovation(from 4th Industrial Revolution perspective)
Provide new forms of community by creating Community Support Infrastructure
Chubu Electric Power Group’s strengths(from core competence perspective)
See page 33 Renewable Energy Company
21
Aiming to become a total energy service corporate group that is one step ahead—Setting new business goals toward realization of our management vision—
We will quickly and steadily implement measures to further increase
safety at our facilities, including the Hamaoka Nuclear Power Plant. We
will also keep steadily investing in equipment needed for stable supply
while continuing to streamline. When making investments, we will
thoroughly ensure ef�ciency.
In order to make sustainable growth a certainty into the future, we will
conduct appropriate risk management, and on that basis engage in
strategic investment for business growth and development.
We envision a 7% or higher ROE level when we
achieve the �scal 2021 business goal. For the
medium- to long-term ROE level, we will aim for a
level that exceeds the cost of capital while closely
monitoring the necessary shareholders’ equity ratio
and other such factors.
Chubu Electric Power Group will continue to invest in
plants and equipment for a safe and stable supply of
electricity as well as in growth sectors to maintain
sustainable growth and improve our corporate value.
Providing strong shareholder returns is an important
mission for our Group. We will continue to pursue stable
dividends, and consider our pro�t growth. Our target
consolidated payout ratio is over 30%.
Growth �eldsBasic conceptual approach to investment and capital policy
ROE
% or higher7Level when the �scal 2021business goal is achieved
Consolidatedpayout ratio
% or higher30
[5-year total up to �scal 2023]
billion yenor more300
billion yen100billion yen100billion yen100
Renewable energy:
Overseas business:
New growth:
Renewable energy• As to renewable energy, we have declared the goal of new
development of 2,000 MW or more (up to around 2030). In order to accelerate this initiative, we established the Renewable Energy Company in April 2019.
• We will collaborate with various corporations with a view to realizing a low-carbon society, working to develop and popularize domestic renewable energy power sources by participating in investment funds and related activities. We will additionally engage in implementation and support for the model of local production for local consumption and other such activities at the regional level.
Overseas businesses Engage in business centered in Europe, North America, and Southeast Asia
Using its own resources (electric power grid, sales and solutions, renewable energy generation), Chubu Electric Power will aim to provide new community services that contribute to the resolution of social issues in every country and region, as we do in Japan, with a focus on Utility business that supports local communities by providing stable, affordable public infrastructure services and Clean energy business that contributes to global realization of a low-carbon society
New GrowthIn order to support the vision for society as it changes toward a human-centered smart society (Society 5.0), Chubu Electric Power will provide new forms of community by taking the resolution of social issues as a point of departure and bringing about the precise inclusion of technological innovation (Industry 4.0) together with the evolution of conventional energy infrastructure into Community Support Infrastructure (Utility 3.0).
Strengths cultivated in the energy business• Connections and relationships of trust with customers• Knowledge of building and operating electricity infrastructure• Energy-saving and CO2 reduction proposals based on optimal use of energy that
leverage our technical capabilities and proposal capabilities
Services to raise the quality of life of individuals by using various data
Community services based on connecting and evolving several kinds of social infrastructure
Necessary investmentin electric power safety
and stable supply
Strategic investment in growth �elds
Ef�ciency indicator (ROE)
Shareholder return policy
Submarine power transmission business for offshore wind power plants
Investment business, incubation, human asset development
Power distribution/electricity retail business
Expansion throughM&As and alliances
Expansion throughM&As and alliances
Country Project (Business in operation)
Europe
Asia
Africa Paci�c Central and South America
Middle East
North America
Germany
Singapore
Philippines
Electric power company: Utility 3.0
Evolution of the energy industry by means of social change and technological innovation
New growth fields
Around 2030As of December 2017(including Group companies)
Installed capacity
Biomass 7
Wind power 172
Solar power 292
Hydro power 2,143
2,610 MW2,560 MW
2,000 MW or moreof new development
(excluding pumped storage)
As of December 2018(including Group companies)
Human-centered smart society Greater efficiency and customizationby means of AI and IoT
Society: Society 5.0 Industry: Industry 4.0
Resolving social issues(from perspective of needs)
Technological innovation(from 4th Industrial Revolution perspective)
Provide new forms of community by creating Community Support Infrastructure
Chubu Electric Power Group’s strengths(from core competence perspective)
See page 33 Renewable Energy Company
Chubu Electric Power Company Group Integrated Report 2019 22
Feature 1