19Tokyo Gas Group FY2018-2020
Medium-Term Management Plan

GPS2020

Tokyo Gas Group FY2018-2020
Medium-Term Management Plan

GPS2020

In November 2011, the Tokyo Gas Group released its Group Management Vision: “Challenge 2020 Vision - Initiatives
by the Tokyo Gas Group for Energy and for the Future” .
In our previous management plans, “Hop” (FY2012-2014) and “Step” (FY2015-2017), our goals were to realize a
integrated energy and global corporate group. In addition to widely expanding our business domains and areas,and forming seven business domains, we also built a new group formation.
During the “Jump” period (FY2018-2020), we will deploy the Tokyo Gas Group’s “GPSxG” system to generate real newvalue in “the things we can do” while pressing forward with the integrated vision of non-continuous reform (business
transformation unprecedented in its boldness and fundamental reform of our organizational structure).
The 2020s will be a period of solid growth and forward movement.

Tokyo Gas’s
Concept of theComing Era

12

3

The Era of Natural Gas

The Era of Single-Source
Providers of Electricity and Gas

The Era of Next-Dimensional
Innovation Fueled bythe Rapid Digital Evolution

With its excellent stability, economics, andenvironmentally friendly characteristics,
natural gas is becoming an increasingly
important energy source, both in Japan andaround the world.
Going forward, natural gas is expected tobecome more widely used, in a greater rangeof fields and areas, as it expands dynamicallyon a global scale.

Transition from
“Goals” to“Capabilities”

Until now, customers in Japan were only able
to buy electricity from electric powercompanies, and gas from gas companies. But
now, with the full deregulation of the electric
power and gas retail markets, consumers inJapan can now purchase both electricity andgas from a single supplier.
Moving forward, it will now be possible for us topropose and introduce optimal energy systems
combining both gas and electric power.

We will pay close attention to such changes
as we move forward.

During the “Jump” period, we will deploy the Tokyo Gas Group’s “GPSxG” system to generate real new value in“the things we can do” while pressing forward with the comprehensive vision of non-continuous reform(business transformation unprecedented in its boldness and fundamental reform of our organizational structure).
The 2020s will be a period of solid growth and forward movement.

Integrated energy
Provide optimal energy, featuring gas and electricity
as a packaged service.

Provide a one-stop offer for a full range of services
designed to meet life stages andneeds of residential customers.

We will provide energy services andengineering for our commercial and industrial customers
to reduce their energy usage and costs.

VisionThe rapid evolution of digital technologies suchas IoT and AI is having an enormous impact
on daily life and industry. These technologies
are expected to spur new kinds of innovationthat differ from anything seen before.

GlobalEstablish offices in strategic areas and concentrate
management resources to engage in proposal planning.
Contribute to building energy infrastructure incoordination with the governments and enterprises in the
fast-growing countries of Southeast Asia and other regions as
the energy supply and demand structure of these regions
continues to evolve.
Build a firm foundation for profitability in North America andother regions where deregulation and market trading of energy
is advancing, while acquiring and using
the know-how that will contribute to our other businesses
in Japan and overseas.

In fiscal 2019, we will formulate a future long-term management vision for the Tokyo Gas Group.
To shape the next fifty years, we will see the changes in the surrounding business circumstance as an opportunityand strive to create new value by pursuing innovation.

20TOKYO GAS INTEGRATED REPORT 2019

Gas

Electric PowerGas handling volume
Number of customers (with city gas meters)

11.90
millionAiming toachieve
2.4 million
by the endof FY2019

Electric power sales volume
Number of customers(electric power contracts)

2.20 million
1.00
million11.50
million31 billion kWh

Service
In addition to gas and electric power as apackage, we will propose and deliver optimal
service combinations to match customers’
lifestyle and business needs.
Lifestyle services including gas devices
and equipment

end of( at theFY2020 )Target set
in 2017
15 billion kWh

10.85
millionEngineering services
Regional development services (Real estate)

8.27 billion kWh

FY2011FY2017

FY2020Tokyo Gas power sources (existing)Tokyo Gas power sources (replaced or new)Alliances or market procurement
Aim to reachapproximately 5.0 million kW

15.0

19.1

20.7

billionm3

billionm3billionm3

GlobalUtilizing our experience in the LNG value chain
management, we will deepen and expand ourbusiness operations according to the regional
characteristics of each area.
We will participate in upstream,
midstream and downstream business
operations to acquire know-how andenhance our revenue base.

NorthAmerica
3.0 million kW

This area is expected to see further

Southeast growth. We will continue to drive
initiatives in midstream and downstream
Asiabusiness operations.

1.6 million kW

Australia
FY2011FY2017

FY2020FY2017

FY2020We will seek to maximize the value ofexisting upstream projects.

2020s

Cash flow distribution method for FY2018-2020
Cash provided
by cash flows

Cash out

1,180 billion yen

1,180 billion yen(3-year total)

Consolidated
operatingExternal loans,
cash flowetc.

810
billion yen (69%)

370
billion yen (31%)(3-year total)

Capitalinvestment

Investment andfinancing

730

290

billion yen (62%)

billion yen (25%)

Profit breakdown
Operating profit + equity income

130107

Overseasbillion yenbillion yen

20%

Shareholder
returns (dividends,Services/ Other

20%
10%

treasury stock)

ElectricPower

160

50%
50%

billion yen (13%)*
FY2017

ElectricpowerGas

FY2020Future*Equivalent to 60% of consolidated net profit in
FY2018 to FY2020

Investments for infrastructure development,
future advancements, and breakthroughs
Total investment in individual segments
over three years (¥ billion)

FY2018-2020

1,020 billion yen(Avg. 340 billion yen / year)

500 (49%)
30 (3%)
230 (23%)
Real estate investment amount100
included in the above
Overseas260 (25%)
GasElectric power
Services / Other

Consolidated operating
cash flow

Profitability (ROE)

Shareholder returns(Total payout ratio)

Stability(Debt-to-equity ratio)

FY2017244 billion yen

5.5%

60 %

0.71

FY2020280 billion yen

Approx. 8 %60 %Approx. 0.9*Figures for FY2017 andthe gas handling volume
figure for FY2011 arevalues estimated at thetime of plan formulation.