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Outline ofFinancial Resultsfor Fiscal Year 2019
April 1, 2019 – March 31, 2020

May 19, 2020
JGC HOLDINGS CORPORATION
General Manager, Group Finance & Accounting Department

Shinichi Taguchi

My name is Taguchi, General Manager of the Group Finance and Accounting
Department.
I am going to give you an outline of the financial results for Fiscal Year 2019
which ends in March, 2020.

Contents

1.

Highlights of Fiscal Year 20192.

Income and Comprehensive Income

3.

Segment Information

4.

Balance Sheets

5.

Cash Flow

6.

Outline of Contracts

7.

Forecasts for Fiscal Year 2020

2

1. Highlights of Fiscal Year 2019

•Profitability was improved on several projects, both
domestic and overseas, due to steady progress inconstruction. The profit ratio was increased by 1.7pt fromthe previous year.

•The impact from the spread of COVID-19 was reflected in
the assessment of project profitability.

•A healthy financial position has been maintained. Financeliquidity was improved by a significant increase in operating
CF as of March 31 2020.

•Annual dividend per share of ¥12.00 is maintained asannounced at the beginning of the fiscal year.
3I will begin with a review of the highlights for the Fiscal Year 2019.
Profitability was improved in conjunction with the steady progress of construction
work in several projects, both domestic and overseas. Gross profit ratio wasincreased by 1.7 points from the previous fiscal year.
As for the spread of the new coronavirus, potential impacts have been reflected in
the assessment of project profitability. As a result, the gross profit for the year
was affected around 8 billion yen.
In terms of financial stability, we have maintained a robust financial base. InFiscal Year 2019, cash and cash equivalents increased by approximately 100
billion yen, mainly due to the large amount of positive operating cash flow, which
has brought an improvement to our liquidity.
Based on the above, the dividend per share has been maintained as announced
at the beginning of the year.

2. Income and Comprehensive Income【Unit: Billions of Yen】

RevisedFY2018FY2019Difference

Net sales619.2

480.8△ 138.4

480.0

Gross profit

44.9

43.3

△ 1.6

43.0

Proﬁt ratio

7.3%

9.0%

+1.7pt9.0%

Operating income

23.2

20.2

△ 3.0

20.0

Ordinary income

32.3

22.3

△ 9.9

22.0

24.0

4.1

△ 19.8

4.0

24.2

4.2

△ 19.9△ 6.2△ 18.5△ 12.217.9△ 14.2△ 32.2

Profit attributable toowners of the parent
ProfitOther comprehensive
incomeComprehensive income

Forecast

4

We move to the Statement of Income and the Statement of Comprehensive
Income.
The results turned out to be almost in accordance with the revised forecast
announced on May 12.
Net sales was affected by the reduction of the order backlog, and was 480.8
billion yen, which is 138.4 billion yen less than the previous fiscal year.
Gross profit was 43.3 billion yen, which represents a 1.6 billion yen decrease.
The gross profit margin improved by 1.7 points to 9.0%.
Operating income was 20.2 billion yen, which represents a decrease of
approximately 3 billion yen from the previous fiscal year. SG&A expenses
increased by 1.4 billion yen due to reclassification of direct department andindirect department following the transition to a holding company structure.
Ordinary income was 22.3 billion yen, which represents a decrease of 9.9 billion
yen from the previous fiscal year. Non-operating expenses increased by 7.6
billion yen due to foreign exchange losses caused by the appreciation of the yen
and the allowance for doubtful debts.
Profit attributable to owners of the parent was 4.1 billion yen, which represents adecrease of 19.8 billion yen from the previous fiscal year.

Extraordinary income was recorded in the fourth quarter due to the sale of crossshareholding and business investment assets, resulting in pretax income almost
as forecasted at the beginning of this fiscal year.
On the other hand, corporate income taxes increased by 13.4 billion yen from theprevious fiscal year due to an increase in foreign income taxes.
Comprehensive income was loss of 14.2 billion yen due to negative effect of
currency translation adjustment accounts caused by the appreciation of the yen.

3. Segment Information
Segment profit

Net sales【Unit: Billions of Yen】

TotalEngineering

564.0△24.3％FY2018FunctionalMaterials
Manufacturing

45.9

+1.4%

FY2018426.7【Unit: Billions of Yen】

13.7

FY2019FY201846.6

7.4

FY2019FY2018△12.4%

12.0

FY2019△8.9%

6.7

FY20195

Next is the segment information.
In the Total Engineering segment, net sales was decreased by 24.3% comparedto the previous fiscal year to 426.7 billion yen with the completion of large LNG
projects such as Yamal and Ichthys LNG.
Segment profit decreased by 12.4% to 12 billion yen. Gross profit increased
significantly in the fourth quarter, due to factors such as conclusion of changeorders in overseas projects, drawdown of contingencies in completed projects,
and other profit improvements in domestic and overseas projects. On the otherhand, in conjunction with the wide spread of the novel coronavirus, we havecarefully examined the impact on the projects that are underway, have estimatedthe additional costs that may arise due to the extension of the delivery date, anddecrease in productivity, etc., and such risks have been factored into the project
profitability in some projects.
The profit margin was slightly increased.
In regard to the functional material manufacturing segment, although we wereable to secure roughly flat sales compared to the previous fiscal year of 46.6
billion yen, segment profit was decreased by 8.9% to 6.7 billion yen.
Although oil, chemical catalysts and environmental protection catalysts showed
good result, profitability declined due to a decrease in the fine chemical field
caused by the impact of the United States-China trade frictions.

4. Balance Sheets

Total liabilities & net assets

Assets【Unit: Billions of Yen】

708.8

541.7

167.1

708.8

671.2

△3.7

△33.7

Current
assets

537.9

133.3

FY2018FY2019JV Cash122.3
JGC Portion

141.9【Unit: Billions of Yen】

671.2

223.5

+4.8

74.9

△23.0

410.3

△19.3

228.3

51.9

390.9

Current
liabilities

Non-current
liabilities

Total netassets

Non-currentassets

FY2018FY20196

Next are the consolidated balance sheets.
Total assets decreased by 37.5 billion yen to 671.2 billion yen.
Non-current assets decreased by 33.7 billion yen, mainly on decrease ininvestment securities from the sale of cross-shareholding and business
investment assets.
In liabilities, non-current liabilities decreased by 23 billion yen. The main reason
for the decrease is that the transfer of 20 billion yen corporate bonds to beredeemed this year to current liabilities.
Net assets decreased by 19.3 billion yen due to the payment of dividends and thenegative currency translation adjustment accounts.
The shareholders equity ratio was 58%.
The Company's portion of JV cash was 141.9 billion yen, and the funds havebeen managed well.

5. Cash flows

92.4【Unit: Billions of Yen】

19.3
△7.6

△3.0

261.8

160.8

7

Next are the consolidated statements of cash flows.
Cash and cash equivalents increased by approximately 100 billion yen this fiscalyear, and the end of period balance was 261.8 billion yen.
Cash flow through operating activities became positive 92.4 billion yen due to theend of the payments of the reimbursable costs in the Ichthys LNG project, as wellas collection of receivables in the Algerian projects.
Cash flow through investment activities became positive 19.3 billion yen. Thiswas resulted from the sale of cross-shareholding and business investment assets
in conjunction with the review of the significance of their holding assets.
The negative cash flow of 7.6 billion yen from financing activities was mainly due
to the payment of dividends.
In addition to the cash balance, we have 30 billion yen borrowing facility undercommitment line agreement with financial institutions, and at the current time, wemaintain strong liquidity.

6. Outline of Contractsⅰ）New Contracts【Unit: Billions of Yen】

FY2019 ActualOverseas

62.4

Domestic

127.1

Total

189.6

8

The next topic deals with new contracts.
Orders received remained at 189.6 billion yen.
The main projects for new orders were domestic power generation andpharmaceutical related projects, etc.
In regard to the LNG project in Mozambique for which we expected to beawarded in the fourth quarter, the client has delayed their final decision on theinvestment, and the order has not been recorded.

ⅱ）Outstanding Contracts
By Region

By Business Area
【Unit: Billions of Yen】

8%

5%

12%

7%
5%

9%

5% 8%

941.6

52%

1,208.3

7%

8%
6%

58%

941.6

64%

FY2018■Oil & Gas development■Petroleum refining□LNG■Chemical■Power generation, nuclearpower■Others

2%2%

FY2019FY2018FY2019

144.5
64.8
730.8
109.1

76.2
55.1
602.2
96.4

■Japan95.766.8■Oceania

63.2

44.6

■South East Asia
□Middle East■Africa■North America & Others

3%13%15%61%

FY2019Major
Contracts

17%

17%6%

10%

1,208.3

FY2018【Unit: Billions of Yen】

FY2018FY2019

204.4
102.6
68.1
177.5
31.2
624.2

FY2019Over 100 Billion Yen

Over 50 Billion Yen

Over 30 Billion Yen

LNG（Canada）

FLNG（Mozambique）

Chemicals (Thailand)
Biomass Power Generation（Japan）

158.0
70.8
32.6
119.6
18.1
542.2

9

Next, we refer to our outstanding contracts.
The order backlog as of the end of March 2020 was 941.6 billion yen, which
represents a decrease of approximately 260 billion yen compared to the end of
the previous fiscal year.
The main projects were LNG in Canada, FLNG in Mozambique, chemicals in
Thailand, and domestic biomass power generation.

7. Forecasts for Fiscal Year 2020
This forecast has been prepared based on the assumption that the impact from the spread of
COVID-19 will not significantly worsen and that our business environment will be normalized
by the end of FY2020.
【Unit: Billions of Yen】

FY2019 ActualForecast

New contract

189.6

670.0

Net Sales

480.8

480.0

Gross Profit

43.3

43.0

Proﬁt ratio

9.0%

9.0%

Operating income

20.2

20.0

Ordinary income

22.3

23.0

4.1

8.0

¥12.00¥12.00-¥107.00

Income attributable toowners of the parent
Annual dividend per share
Forecasts based on(￥/US$)

10

Lastly, the forecasts for Fiscal Year 2020.
This forecast has been prepared under the assumption that the impact of thespread of the novel coronavirus will not significantly worsen, and that ourbusiness environment will return to normal by the end of the fiscal year.
New orders are forecasted to be 670 billion yen, with a focus on projects that are
anticipated to be feasible at this point.
Assuming that sales form new orders will be limited, the net sales and the otheritems below have been forecasted mainly on the progress of projects in the orderbacklog.
Net sales is 480 billion yen.
Gross profit is 43 billion yen.
Operating income is 20 billion yen.
Ordinary income is 23 billion yen.
For the above items, the performance is the same as the previous fiscal year.
Income attributable to owners of the parent is 8 billion yen.In regard to the tax expenses, considering the situation that foreign tax credit may
not be available, the forecast is based on the assumption to bear double taxationof foreign and Japanese income taxes.
Extraordinary items such as asset sales and impairment are not included in thisforecast.
The dividend per share is 12 yen. The dividend payout ratio is forecasted to be37.5%.
Our forecasts are based on an exchange rate of 107 yen to the US dollar. The
effect caused by exchange rate fluctuations per one yen basis is 3 billion yen forsales, 100 million yen for gross profit, and 300 million yen for ordinary income.
This concludes our explanation of the outline of the financial results for Fiscal Year
2019.

Appendix

11Reference（Forecasts for Fiscal Year 2020 by segment）
This forecast has been prepared based on the assumption that the impact from the spread of
COVID-19 will not significantly worsen and that our business environment will be normalized
by the end of FY2020.

Total

Functional

engineering

Materials【Unit: Billions of Yen】

Others

432.0

42.0

6.0

Segment profit

15.0

5.0

0.0

Proﬁt ratio

3.5%11.9%

0.0%

Net sales

12Reference（Net sales & New Contracts by Region）

New Contracts

Net sales【Unit: Billions of Yen】

FY2018【Unit: Billions of Yen】

FY2019FY2018FY2019Japan

195.3(31.5%)

193.0(40.2%)

Japan

133.3(14.3%)

127.1(67.1%)

South East Asia

64.0(10.3%)

62.7(13.0%)

South East Asia

94.1(10.1%)

29.4(15.5%)

Oceania30.6(5.0%)

7.6(1.6%)

Oceania21.3(2.3%)

0.6(0.7%)

Africa93.1(15.0%)64.9(13.5%)

Africa2.0(0.2%)

8.4(4.5%)

Middle East

92.3(14.9%)

48.8(10.2%)

Middle East

40.5(4.3%)

12.4(6.6%)

Europe & CIS

116.8(18.9%)

5.5(1.2%)

Europe & CIS

30.0(3.2%)

2.3(1.3%)

26.9(4.4%)

98.0(20.3%)

613.9(65.6%)

8.9(4.7%)

619.2(100.0%)

480.8(100.0%)935.4(100.0%)

189.6(100.0%)

North America& Others
Total

North America& Others
Total

13

Reference（Historical data chart）【Unit: Billions of Yen】

Gross profit

Net sales
722.9

693.1

44.9

44.9

619.2
480.8

Operating income

43.3

43.0

21.4

23.2

20.2

20.0

480.0

1.4
FY2016 FY2017 FY2018 FY2019 FY2020

FY2016 FY2017 FY2018 FY2019 FY2020

Forecast

Forecast

32.3

FY2016 FY2017 FY2018 FY2019 FY2020
Forecast

Profit attributable toowners of the parent

Ordinary income

24.9△ 21.4

New Contracts

935.4

24.0
22.3

23.0

16.5
4.1

670.0

8.0
506.2

547.8

189.6
△ 22.0△ 15.2FY2016 FY2017 FY2018 FY2019 FY2020
Forecast

FY2016FY2017FY2018FY2019FY2020
Forecast

FY2016FY2017FY2018FY2019FY2020
Forecast

14

Cautionary Statement

This presentation may contain forward-looking statements that reflect JGC’s plans and expectations.
Such statements are based on currently available information and current assumptions of future
events which may not prove to be accurate. Such statements are also subject to various risks anduncertainties that could cause actual results to differ materially from those forward-looking statements.
JGC Holdings Corporation undertakes no obligation to update any forward-looking statements after
the date of this presentation. These potential risks and uncertainties include, but are not limited to:•changes in general economic conditions, including foreign currency exchange rates, interest rates
and other factors that could affect our profitability•changes in government regulations or tax laws in jurisdictions where we conduct business

For questions concerning this material please contact:JGC HOLDINGS CORPORATIONGroup Management Development Department
Tel: 81-45-682-1111 Fax: 81-45-682-1112
E-mail：ir@jgc.com