Revitalization Plan Update

May 7, 2021
Chiyoda Corporation© Chiyoda Corporation 2021, All Rights Reserved.

Table of Contents
1.

Executive Summary

2.

Revitalization Plan in Review

3.

Business Environment:
Accelerating Decarbonization

4.

Vision for 2030

5.

Business Portfolio Transformation

6.

Digital Transformation

7.

SDG Initiatives
11. Executive Summary

2

Executive summary
Revitalization Plan in review

 We have completed the second year of our five-year Revitalization Plan.
We are making steady progress on the three major actions of this plan:“Further develop the risk management structure,” “Enhance EPC
execution and management capacity,” and “Reinforce human resources”(p5)
 We expect that there will be a delay of 2-3 years in achieving ourquantitative target for “accumulating consolidated-basis net profits” due toexternal factors such as the COVID-19 pandemic and falling oil & gas
prices (p6)Business roadmap for the future Accurately gauge the macro trend of the accelerating transition to acarbon-free society as we move towards carbon neutrality in 2050 (p8)
 To achieve our vision for 2030, a waypoint on this path, along withcompleting the Revitalization Plan, with our collective strength inengineering and our real-world implementation capabilities, we willtransform our business portfolio and further improve our ability togenerate profits (p10)32. Revitalization Plan in Review

4Revitalization Plan Review (Qualitative)
Revitalization Plan actions
Topic

Identified action (5 years)

Progress (recent 2 years)

Assessment• Further develop risk management
and project execution structure• Established an integrated risk
management system• Avoided accepting orders that exceed
our human resources availability○/△• Further enhance corporate
governance• Kept 4 independent outside directors• Segregated business oversight andexecution (only two executives(president & CFO) may concurrently
serve as board members)○

2. Enhance EPC execution
and management capacity• Enhance EPC execution andmanagement capacity• Strengthen construction execution
capabilities• Improving real-time grasp of project
execution and predictive accuracy with
the introduction of Chiyoda AWP* andintegrated data management• Strengthened organization & humanresources for contract & sub-contract
management○/△

3. Reinforce humanresources• Enforce meritocratic selection,
diversify skill sets, proactively
recruit external talent• Deployed new HR system in April
2021

1. Further develop the risk
management system○*Chiyoda Advanced Work Packaging (AWP) is a project management tool using digital technology whereby construction work is
packaged through integrated management to optimize the EPC process from engineering and procurement to construction,commissioning, and handover.
○ : Achieved△ : Ongoing5

Revitalization Plan Review (Quantitative)
Revitalization Plan quantitative targets
Topic

Identified action (5 years)

Progress (recent 2 years)

Assessment

1. Order targets• Annual LNG/gas projects of
JPY200-450bn, global
environmental projects of
JPY100-150bn• 2 year totals(*):
LNG/gas projects approx. JPY 850bn
Global environmental projects approx. JPY
200bn• Some large projects have been postponed due
to falling oil prices and the COVID-19
pandemic.
• Received order for large project in Qatar○/△

2. Net profit• Transform earnings structure inorder to consistently generate
JPY10-20bn in net profit• Accumulate JPY90bn in profits
over 5 years• Posted profits of JPY 20bn in first 2 years of
Revitalization Plan△

3. Increase theshareholders' equity ratio• Lift shareholders' equity ratio
back up to 20% or better• Shareholders' equity ratio has returned to 11%○/△

4. Eliminate accumulated
losses• Eliminate accumulated losses
during timeframe covered by
the business plan

• The accumulated losses have been eliminatedthanks to the accumulation of profits and areduction in capital○

5. Reduce fixed costs• Reduce consolidated-basis
SG&A to JPY15bn• Consolidated-basis SG&A was JPY 13bn in
FY2020○*Global environmental projects includes domestic refinery and petrochemical projects and international metal projects.
○ : Achieved△ : Ongoing

6

3.

Business Environment:
Accelerating Decarbonization

7

Business Environment:
Accelerating the Transition to a Decarbonized Society(Gtoe)
20

Widening adoption of low-carbon& green LNG

Global primary energy consumption

15

 Demand for natural gas & LNG will remain firm as they
are a pragmatic solution to address both growing
energy demand and decarbonization

105

 The widespread adoption of renewable energy will beessential to realizing a carbon-free society bycomplementing with natural gas & LNG

The accelerating shift todecarbonization/hydrogen energy Hydrogen strategies are being drafted becausehydrogen utilization is viewed as a critical factor inall sorts of industries—materials, power generation,
mobility, steel—to achieve the goal of carbon
neutrality by 2050 in countries and regions aroundthe globe

2018
2030
2040
2050
Coal
Oil
Natural Gas
NuclearRenewables
Source：The Institute of Energy Economics, Japan IEEJ Outlook 2021

Public policy goals around the world
Country

Public policy goalsJapan

By 2030, reduce greenhouse gases by 46% compared to 2013.
Boost hydrogen consumption to 3mn tons in 2030 and 20mn
tons in 2050
Reduce greenhouse gas emissions by 50-52% compared to2005.
California: 1mn FCVs, 200 hydrogen stations, 400mn tonshydrogen production by 2030

USEU Countries and regions are working to expand themarket by setting specific quantitative targets, suchas goals for hydrogen consumption and FCVs(*) in
operation by 2030
* FCV : Fuel Cell Vehicle

China

Boost electrolytic hydrogen production capacity to 40GW, 10mn
tons
Support development of FCV manufacturing supply chain.
FCVs: 50,000 vehicles by 2025, 1mn vehicles by 2030-2035
Hydrogen stations: 300 locations by 2025, 1,000 locations by
2030-2035

Source：Prepared by Chiyoda based on Ministry of the Environment’s website

8

4.

Vision for 2030

9

Vision for 2030
Vision for 2030
1. With our advanced technological capabilities, we will accelerate the transition to a carbon-freesociety, including hydrogen energy, and contribute to the achievement of carbon neutrality by 2050
2. We will transform our business portfolio by pursuing growth in the carbon-neutrality and life
sciences fields while at the same time creating and strengthening models for recurring business,
lifting the share of profits from new areas to 50%
3. We will transform our earnings structure in order to generate a net profit of JPY30bn or higher
Profit split between existing and new businesses
By transforming our business portfolio, we aim for a
50:50 split in profits between existing and new
businesses

2020

Profit objective
We aim for an earnings structure that will allow us togenerate net profit of JPY30bn or higher by 2030
(JPY bn)

40

2030

10%

30
50%
90%

Existing business domains
New business domains

50%

20
10
0
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

10

5.

Business Portfolio Transformation

11

Business Portfolio Transformation

To achieve our vision for 2030, by 2025 we will expand our EPC work in new fields and establish recurringbusinesses (sources of stable income from licensing, catalyst, digital solutions, and business investment)
We aim to shift towards more stable income by 2030 by expanding income from recurring businessBusiness domains & portfolio transformation(Pre-tax profit breakdown)
Recurring businesses

2 Recurring businesses
1 EPC in new fields

Newbusinesses
30%

EPC in new fields

EPC in existing fields

EPC in existing fields

EPC in existing fields

Current breakdown

FY2025

FY20301

Expand EPC work in the decarbonization & life
sciences fields
 Renewable energy (solar, wind), energy storage,
power management related plants
 Pharmaceutical/bio-tech related plantsNewbusinesses
50%

Expand EPC work in the carbon neutrality field Hydrogen/ammonia, carbon cycle value chain related
facilities

Expand sources of stable income by leveraging technologicalfoundation and business investment2

 Licensing & Catalysts income in the decarbonization field Digital solutions subscription income
 Returns on business investment in the decarbonization & life sciences fields

12

Chiyoda Business Integration with a View to Decarbonization
 Aggressively promote hydrogen utilization across a wide range of industries as a means of realizing acarbon-free society
 Optimize energy management systems to lower costs and realize decarbonization
Chemical engineering andtransport

Energy source
Oil &naturalgas

Cracking/
refining

Users

Hydrogen utilizing industries

Green
LNG

Power generation
Low CO₂ shift

CCUS(*)

Hydrogen direct reduction steelmaking

CO₂

Automotive and Mobility
Hydrogen/ammonia
chain solution

RenewableenergyChemical raw materials
Heating fuelH₂

Energy storage / energy management/ microgrids
New business opportunities for Chiyoda
EPC in existing fields
EPC in new fields
Recurring businesses
Hydrogen

PowerPower system••

Base load
Supply and demandbalancing/
distributed powersources

Onsite power
generationequipment

Gas grid

Other*CCUS: Carbon dioxide Capture, Utilization and Storage

13

Existing business domains

Initiatives to Decarbonize and Reduce CO₂
We will help the transition to cleaner energy in conventional LNG, oil,petrochemical, and power generation
Qatar: NFE LNG(*) export terminal (new LNG plant) EPC phase Qatar：World’s largest trains

Significance of this order to Chiyoda
This project incorporates carbon dioxide capture and storage equipment andaims to significantly reduce greenhouse gas emissions compared to aconventional LNG plant.
It will crystallize our technical know-how of decarbonization.
Courtesy of Qatargas Operating Company Limited

US: FLG(**) Project LNG cooling equipment
electrification
Replaces gas turbine with the world’s largest electricmotor-driven cooling system. Completed the facilities
that produce 15mn tons of LNG per year

Optimizing plant operations with EFEXIS™

Client DX support: Optimizing plant operations
Deploying the EFEXIS™ solution helps to optimize ourclients’ plant operations and maximize asset value inJapan and across the world.
It also helps to improve plant productivity, reduce
operating and maintenance costs, and reducegreenhouse gas emissions in the operation.

Courtesy of Freeport LNG Development, L.P*North Field East LNG export terminal in Qatar**Freeport LNG export terminal in United States (3 Trains)

14New business domains

Hydrogen Business (SPERA HydrogenⓇ, ammonia)
By making the most of our engineering solutions and taking advantage of the benefits ofvarious hydrogen carriers, we will help to make a hydrogen-based society a reality

Business environment that will be key to widespread use of hydrogen/fuel ammonia
Accelerate shift toa decarbonized society

Accelerate technologicaldevelopment

Make the mostof existing facilities

Support hydrogen &ammonia imports

Broadening usage,incl. FCVs

Offer optimized equipment
configuration/cost/schedule for every
phase of the hydrogen value chain

Strategy

Objective

Hydrogen/ammonia related engineering Help to scale up hydrogen/ammonia
infrastructure from production to import Build SPERA Hydrogen chain

Participate in cross-industry regionalhydrogen deployment projects inlocations like Japan, Asia such asSingapore, and Europe

Strategy

Objective

Hydrogen/ammonia chain solution business Offer hydrogen chain solutions in Japan
Asia such as Singapore, and Europe,where there is ample hydrogen importdemandVolume ofhydrogen used inhydrogen / ammonia
projects involving
Chiyoda in 2030
Total 1.75 million tons
(equivalent to about
6 GW)

 Leverage our technology to offer
licensing & catalysts

15

New business domains

SPERA HydrogenⓇ Will Help to Spur a Hydrogen-based SocietySuccessful demonstration of the world's first international hydrogen supply chain between Brunei and
Kawasaki, Japan
Accelerating to establish a hydrogen supply chain revolving around Singapore and Japan

2050

2030

Completed international hydrogen supply chain
demonstration

2015-2020

2025

Carbon neutral

Commercialization

Semi-commercialization

Participate in cross-industry regional hydrogen
deployment projects in locations like Japan, Asia suchas Singapore, and Europe.

2013-2014
Catalyst development(Bench scale)Set up technology
demonstration(Pilot scale)

2000-201016

New business domains

Life Science BusinessIn light of the world’s growing unmet medical needs, we will become a provider of high valueadded biotechnology & life science solutions
The changing environment for biotechnology & life science (LS)Growing vulnerabilityof Japan’s pharma
supply chain

LS manufacturing
facility returning toJapan

Lower-cost drug
manufacturing

COVID-19

Growth ofadvanced
medical care

 Ongoing EPC work for Shionogi &Co., Ltd. Covid-19 vaccine factoryfor genetically modified protein.

Unmet medical needs

Courtesy of Unigen inc.

Become an industry leader in EPC
for biotechnology & life science

Strategy

Objective

Biotechnology & pharmaceutical life scienceengineering Ramp up group-wide project execution andmanufacturing facility engineering capabilities
 Expand into EPC areas that solve themedical needs of society, such as advanced
bioprocess plants and manufacturing new
types of corona vaccines

Challenge into the small-molecule drug
and cell base CDMO(*) business andPursue horizontal deployment andmonetization of the technologies.
*Contract Development Manufacturing Organization**Contract Research Organization

Strategy

Objective

Lateral expansion & monetization of next-generation
manufacturing process technologies
 Implement continuous manufacturing forpharmaceuticals that uses our continuous
manufacturing process technologies
 Industrialize the expansion cell culture process/ challenge into the cell base culture CRO(**)
business & CDMO business

Target for orders received
for 2030
JPY 50 bn

Number of projects
handled in 2030
10 cases / year(contribution todevelopment &manufacturing ofpharmaceutical products)

17

New business domains

Energy Management Business

We will strengthen the EPC business in the fields of renewable energy, energy storage, and energy management (EMS) andmove into the O&M businessWe will create recurring businesses by using the facilities know-how that we have accumulated through our EPC businessand our digital solutions

Business environment for the energy storage and energy management fields
Countries are lifting
renewable energy goals

Realizing clean
base load power

Creation ofbalancing market

Accelerating P2X
technology
development

Decarbonization needsof various industries
Storage battery system for North
Hokkaido Wind Energy Transmission
Corp.

Expand EPC work for renewable energy
incl. offshore wind farms / energy storage /EMS, move into the O&M business

Strategy

Objective

Renewable energy/energy storage/EMS engineering Take advantage of our project management
capabilities to win EPC work in the fields ofoffshore wind farms & energy storage Move into the O&M business for facilities inwhich we have been involved
 Strengthen engineering capabilities for theoverall system optimization in P2X(*) fieldTarget for orders received
for 2030
JPY 50 bn

Offer solutions that optimize utility use byconnecting renewable energy/energy
storage/EMS and plant utilities

Strategy

Objective

Energy utilization optimization business Leverage our EPC facilities know-how and AI-based
renewable energy variability forecasting system toexpand energy storage solutions that connect powersystems and energy storage systems in an optimal
manner Create an Energy as a Service(**) business that
optimizes utilization of existing process & utility

Early income realizationand expansion of profit
base in EaaS businessfor industrial customers,
and expansion to area
utility business Develop advanced technology in the P2X field*Power-to-X: the concept of using compounds produced by electrolysis powered by renewable energy**Energy as a Service: providing one-stop utility-related services, helping to cut costs, increase asset value,
and reduce CO₂ emissions

18

Partnering to Accelerate Commercialization

Life science

Energymanagement

LNG/
petrochemical

Hydrogen/carbon cycle

Accelerate and expand commercialization by proactively co-creating and collaborating with other companies withthe know-how and technology that we lack
Partner technology & know-how
Businesses for
Chiyoda technology &acceleration/expansion
know-how
Trading
BtoC
Decarbonize andReduce CO₂ ofprocess facilities

Process facilities
engineering
Catalyst/scale-up
technologies

Hydrogen supply chain
business

Offshore wind farmengineering

Energy utilization
optimization business

Bio facilities
engineering

Horizontal deployment& monetization of nextgeneration
manufacturing process
technologies

SPERA Hydrogen
licensing & catalysts

companies
Venturecompanies

enterprises
Universities

Specific
underlying
technologies
Balancing supply
and demand

Large project
management know-how
Optimizing energy
procurement and efficiency

Fuel/feedstock
procurement
know-how

Optimizing facility
operations

BtoC businessknow-howLife science facilities project
management know-how

Digital platform
development
technology

Shift to continuous
operation

19

6. Digital Transformation (DX)20

Enhance the Business Model by DX
Enhance the value of our core business models
Medium to longer term
initiatives

Accelerate the Chiyoda Group DX

Medium to longer term
objectives

Company-wide DX promotion•••

Integrateinnovative
digital solutions•

Accelerate deployment of project management data
model and Chiyoda AWP
Deploy supply chain collaboration and digitalmaterials / labor management
PlantStream™(*)provides automated engineering
using digital technology. Proper forecasting of
project completion by establishing concurrent
engineering data models
Digital workplace evolution and proactive
deployment of robotic process automation (RPA)

LNG/petrochemicalbusiness
Energymanagement
Innovate
operation process

Advancedigital EPC•••

By 2025:• Improve project
execution efficiency by
20 %• Improve construction
execution efficiency by
20 %Hydrogen/carbon cycle
Life science

With EFEXIS™, we aim for optimal andautonomous plant operation by combining
engineering expertise and digital / AI technologies
Establish energy management platforms for plants
and communities
Apply digital twin technology to optimize operationof dehydrogenation facilities

Realize the Energy
Transformation (EX) by
engineering the DX on
production, operation,and supply chain**PlantStream™ is a standalone CAD system that reduces the space design processes that are part of basic plant design work by 80% and also hasmade it possible to create 3D models five times faster than before.

21

Enhance the Business Model by DX
Digital solutions We Offer

Innovative digital solution
to maximize customer asset values

PlantStream™

Provide innovative solution combining plant engineering expertise andadvanced AI / digital technologies
LNG Plant
AI
Optimizer™

CDU
Operations
Optimizer

FCC AI
Optimizer

Foaming
Prediction AI
SystemFurnaceDiagnosis realtime support
SystemUsing Deep
Learning AI
technology toindicate
continuous
productivity
improvement forthe best LNG
plant operations

Provide optimal
operatingparameters in realtime during theswitchingoperation of Oil
Refinery

Provide AI system
to achieve optimal
operation for Fluid
Catalytic Cracking
and Residue Fluid
Catalytic Cracking
unit

Mitigate turndown
and/or unplanned
shutdown by
predicting
abnormaloperation(occurre
nce of foaming) ofacid gas removal
unit

Provide webinterface remotely
supporting safe,
efficient and flexible
operation andmaintenance ofprocess furnace
unit in real time

2)

2)

1)

2)

1)

EFEXIS™

Commercial Business ofautonomous CAD withphenomenal precisionand speed that converts
the expertise of skilledplant design engineers
into algorithms• Reduce 80% of manhours spent on 3D
spatial design during
basic design• Develop 3D model 5
times faster than everbeforePlantStreamTM

1) English Video 2) Japanese VideoThe link in production solutions name will direct you to an introduction web page.
When reading a QR code, please hide other QR codes to avoid misreading.

22

7. SDG Initiatives

23

SDG Initiatives
Leveraging our strengths, Chiyoda Group will continue to push ahead on our Revitalization Plan while also
contributing to the development of a sustainable society with our engineering prowess

The Chiyoda Corporate
Philosophy～Our mission to fulfill～
Priority issues (Materiality)
For Chiyoda Group

Revitalization Plan
～ Revitalization andvision for the future ～Chiyoda’s strengths

Affordable andclean energy

Industry, innovationand infrastructure Project execution
capabilities
Use engineering toensure high product quality

Chiyoda CSR values
1.
2.
3.
4.

Climate action

5.

A Reliable Company
Environmental Initiatives
Social Contributions
Respect for Human
RightsCommitment to Fairness“Energy and environment
in harmony”
We will enhance our business inaiming for harmony between energy
and the environment and contribute to
the sustainable development of asociety as an integrated engineering
company through the use of ourcollective wisdom and painstakingly
developed technology.

 Overall optimization
capabilities
Provide optimal solutions forcomplex constraints andproblems
 New technology
implementation capabilities
Combine basic researchand engineering technologies

24Sustained Growth and Reinforcing
Our Reputation for Reliability

Energy and Environment in Harmony
Chiyoda Corporation Corporate Planning Department, https://www.chiyodacorp.com/en/
Forward-Looking Statements: Any projections included in these materials are based solely on information available at the time thispresentation was prepared. It is possible that actual results may vary significantly from the projections due to a number of risk factors
such as economic conditions. The results projected here should not be construed in any way as being guaranteed by the Company.
Investor are recommended not to depend solely on these projections for making investment decisions.

© Chiyoda Corporation 2021, All Rights Reserved.