May 12, 2021

Medium-Term Business Plan
“Building a Sustainable Planetary Infrastructure 2025”
Executive Summary
Under the JGC Group’s newly established “2040 Vision”, the Group will seek tocontribute to enhancing planetary health in five (5) business areas. Over the next five
years through to FY2025, we will be taking on the challenge of “Building a Sustainable
Planetary Infrastructure 2025”, which we are positioning in our new medium-termbusiness plan “BSP 2025”.

1. Review of previous medium-term business plan
Achievements during the previous medium-term business plan (FY2016 – FY2020)
include strengthening risk management and raising the operating income ratio from
3.0% in FY2017 to 5.3% in FY2020. Our positioning of high-performance functional
materials manufacturing as a core business came into clearer focus, and efforts in EPC
operations, such as establishing a track record in infrastructure, steadily laid thegroundwork for future growth. To provide a more robust framework for implementing
our growth strategies, the Group also adopted a holding company structure.

2. Awareness of business environment
In this medium-term business plan, the business environment in the areas defined in the2040 Vision are as follows:Energy transition: LNG business, promoted as a cleaner, lower-carbon fossil fuel,is expected to keep growing steadily amid higher demand in emerging economies.
1Additionally, traditional renewable energy business such as solar power, energy
storage, and biomass power generation as well as new fields including offshore
wind power and hydrogen / fuel ammonia are also poised to offer significant
opportunities in the energy transition to a low-carbon or decarbonized society.
High-performance functional materials: Existing applications of thismanufacturing are likely to thrive, driven by a recovery in demand following theimpact of the pandemic on semiconductor and telecommunications products andchemical / environmental products. Greater demand is also expected in new
applications such as silicon nitride substrates for the power units of EVs, andpolishing nanoparticles for CMP for semiconductors.

Healthcare / Life sciences, Circular economy, Industrial & Urban
infrastructure: Healthcare and Life science markets in Japan and elsewhere areexpected to expand as people live longer and standards of living improve.
Significant business opportunities will also emerge as value chains are formed torecycle plastic waste and the Asian economic growth spurs further development ofwater treatment and railways.

3. Key strategies
From this awareness of the business environment, the medium-term business plan sets
the stage for the Group to transform EPC operations, expand high-performance
functional materials manufacturing, and establish future engines of growth. Two of thestrategies are aimed at securing and expanding revenue in existing operations, and thethird strategy seeks long-term growth towards 2040.

1) Transformation of EPC operations(1) Increasing profitability and competitiveness in mega-sized EPC projects
Having targeted ¥350 billion in net sales from mega-sized overseas EPC projects inFY2025, we will take JGC Group core competencies to the next level. Severer risk
management and project negotiations will improve the gross profit ratio, andoptimized joint venture strategies, digital technologies, and construction methods
will provide a competitive edge in securing orders.

(2) Taking on EPC growth markets and segments
In addition, by expanding EPC operations into growth markets and segments, andby seeking a diversified portfolio, we will pursue a net sales target of ¥300 billion
from EPC business in growth markets and segments in FY2025. Increased revenue
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will be sought by strengthening operations to secure some of the many projects
anticipated for LNG receiving terminals, gas-fired thermal power, solar power, andbiomass power plants, pharmaceutical plants and hospitals, as well as chemical
facilities. Moreover, we will reinforce regional management in Asia, which isgrowing rapidly, and bolster our workforce with the domestic market also in mind.

2) Expansion of manufacturing business for high-performance functional
materials
High-performance functional materials manufacturing will be scaled up as the Groupseeks net sales of ¥60 billion in FY2025. We will work to broaden our revenue base in
our primary business by offering an increased line-up of JGC-developed chemical
catalysts, hard disk polishing nanoparticles, semiconductor manufacturing equipment
materials, and other products. Another engagement will be strategic investment for
future and next-generation business development. Investments will target
development of fine chemical products and silicon nitride substrate facilities, among
other applications. Development will also include carbon recycling catalysts,
electrolytes for all-solid-state batteries, and bone regeneration materials.

3) Establishment of future engines of growth
We will establish the following five (5) business areas defined in the 2040 Vision,
which are especially promising as future growth engines. Net sales of ¥50 billion in
FY2025 are projected, to be developed over the next decade to ¥500 billion.
Energy transition
Carbon management support, offshore wind power, smart O&M, hydrogen / fuelammonia, small modular reactors (SMRs) for nuclear power generation

Healthcare / Life sciences
Smart hospitals, smart plants, digital healthcareHigh-performance functional materials
Carbon / Chemical recycling catalysts, bone regeneration material, etcCircular economy
Chemical recycling of plastic and fiber waste, production of SAF (sustainableaviation fuel)Industrial & Urban infrastructure
Water treatment, railways34. Investment strategy
The path to success of these key strategies will call for a total of ¥200 billion in
investment during the medium-term business plan in areas such as digitaltransformation, M&As, production facilities, business development, commercial
demonstrations, and R&D. Specifically, ¥70 billion will be allocated to transformationof EPC operations, ¥50 billion to expansion of manufacturing business for highperformance functional materials, and ¥80 billion to establishing future engines ofgrowth.

5. Financial targets
Net sales of ¥800 billion are targeted in FY2025, with operating income of ¥60 billion,
net profit of ¥45 billion, and ROE of 10%.

A diversified business portfolio will ensure that the energy transition area is not the only
source of revenue. Transformation will also be sought from the standpoint of businessmodels, where we will expand from an EPC-focused model.

46. Capital and shareholder return policies
Disciplined investment and fund allocation will support our goal of reaching or
surpassing an ROE of 10%. We will respond flexibly in our strategic investments forsustainable growth and stable revenue.
In making strategic investments, we will use cash in hand effectively and maintainsound finances, with the intension of keeping the shareholders' equity ratio at or above
50%.
As for shareholder return, as before, our basic policy is directed at steady annual cash
dividends aimed at a payout ratio of 30%. We will also introduce a minimum ¥15
dividend per share.
Share buybacks will be considered as necessary in light of business situation.

7. Commitment to carbon neutrality by 2050
The core domain of the JGC Group has long been Oil & Gas, but we have taken theopportunity of this transformation for “enhancing planetary health” to commit toambitious target of carbon neutrality by 2050 as a sign of our dedication to sustainably
incremental corporate value. We will work toward the following targets:
1.

Net-zero Scope 1 and 2 CO2 emissions by 2050

2.

Thirty percent (30%) reduction in Scope 1 and 2 CO2 emissions per unit ofproduction by 2030 in support of (1)3.

Reduction in Scope 3 CO2 emissions as determined with stakeholders

To reduce Scope 3 emissions, we will leverage technologies cultivated by the JGCGroup to provide energy transition solutions to stakeholders.
5In responding to climate change, we will disclose relevant information in line withrecommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

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