Financial Strategy and Financial Target
Levels Targeted for by 2035
Appendix

JERA Co., Inc.
May 17, 2024
© 2024 JERA Co., Inc. All Rights Reserved.

Balance and Financial Standard Targets for FY2035

1Achieve the financial structure evaluated highly by the capital market more than ever
• Set financial targets (KPIs) based on• Aim to achieve consolidated net income of 350 billion yen

global peer standards

by FY2035, or sooner.

ManagementIndicators

FY 2025 Target Values(Reference)

Target Levels
by FY 2035

Net Income *200 billion yen350 billion yen

EBITDA*500 billion yen

700 billion yen

ROIC – WACC Spread*

ROIC 4.5%

Profitability

Capital Efficiency

150bps or more

WACC 3.5%
Growth potential

FY2022 - FY2025

FY2024 – FY2035

1.4 trillion yen

5 trillion yen(cumulative)(cumulative)

Net DER

1.0 times or less

0.5 times or less

Net Debt/EBITDA*

4.5 years or less

2 years or lessApprox. 9.0%

Approx. 9.0%

Investment CF

Financial Soundness

Reference

ROE**Excludes the effect of fuel cost adjustment© 2024 JERA Co., Inc. All Rights Reserved.

2Financial Strategy – Capital Allocation Aim to achieve sustainable growth through flexible investment allocation• Flexible allocation of operating cash flow into the three strategic• Enabling sustainable growth shielded frombusiness areas (SP) of the growth strategy, while considering

environmental and political challenges

market environment, technological innovation and political trends

Capital Allocation(1)Capital Investment

Cash-in

Promptly change investment
allocation

Sale of Equity, etc.:
１trillion yen

Cash-out
Shareholder Returns,etc.: 1 trillion yen
Procurement and Repayment

OperatingCash Flow:
5.5 trillion yen

Investment
Cash Flow:
５trillion yen

Target Scale by FY2035

Example: Built-in flexibility
to change actual investment
allocation in response to changing
market conditions

LNG

LNG Transaction Volume

1–2 trillion yen

At least

Renewables

Cumulative Capacity
Developed

1–2 trillion yen

35 million tons

20 GW(2)Hydrogen & Ammonia

Hydrogen & Ammonia Transaction

1–2 trillion yen

Volume Approx.

7 million

tons(3)(1) Accumulated estimates for fiscal years 2024 through 2035
(2) Assumes disciplined investment decisions for high-quality projects while assessing market conditions(3) Details of this initiative will be elaborated in stages based on policy and other assumptions. If assumptions are substantially changed, they will be reviewed.

© 2024 JERA Co., Inc. All Rights Reserved.

Financial Strategy - Balance Sheet Management -3

Hold capital larger than the integrated risk amount and maintain a A credit rating

Image of FY2035

Balance Sheet Management
Toward FY 2035
Credit ratings

Arating
Liabilities

Net DER
Total assets
Approximately
10 trillion yen

Risk buffer

0.5Times or lessNet assets
Amount ofintegrated risk

Net Debt / EBITDA

2years or less

*JERA defines its risks into three categories: market risk, credit risk, and operational risk. The amount of integrated risk is quantifiles from market risk and credit
risk. The difference between the amount of integrated risk and risk capital is defined as a "risk buffer."
JERA has a policy of maintaining a certain level of risk buffer in consideration of the existence of operational risk.
© 2024 JERA Co., Inc. All Rights Reserved.

Aimed Standards for Capital Efficiency and Financial Soundness

4Establish financial KPIs that deliver capital efficiency and financial soundness to maintain a strong credit rating• Aim for financial soundness comparable to that of
non-regulated utilities in Europe• ROIC-WACC spread must exceed 150bps to
obtain a capital market valuation (PBR > 1)

ROIC-WACC spread(times）

Net DER and Net Debt/EBITDA(Year） Target level: 0.5
times or less6

Target level：
150bps3EuropeUtilities
Net Debt / EBITDA

5PBR

2IOCs
1x PBR

1

Utilities(Regulation)

4

3
Utility(Unregulated)
2

Target level:
2 years or less

IOCs
DomesticUtilities

10012345678

ROIC – WACC spread (%pt)

00.0

0.5

1.0

1.5

2.0

2.5

3.0

Net DER (times)

Note: This is made by JERA based on IR materials by other companies© 2024 JERA Co., Inc. All Rights Reserved.

5Rigorous Investment Evaluation Process••For business investment, after formulating investment strategies for each sector, we evaluate and manage
risks appropriately through screening by the Investment Assessment Committee, which includes members who
have experienced investment screening at financial institutions, etc., periodic monitoring, and establishment ofexit criteria.
In risk and return analysis, we use exceeding 200 guideline rates calculated for each country and business inwhich we invest, as targets to ensure the creation of corporate value.

[Investment Evaluation Process]Primary
examination

Secondary
examination

Continue
Sale
Exit

Monitoring (Quarter)

Investment execution

Items to be examined• Risk-return analysis• Company-wide financial
impactBoard of Directors

Leadership Panel

Investment Assesment
Committee

Leadership Panel

Investment Assesment
Committee

Investment strategies foreach sector

Items to be examined• Consistency with thestrategy• Management resource
constraint• Risk-return analysis• Negotiating policy

Exitcriteria

Main monitoring items• Rate of return and cash flow
• Risk parameter© 2024 JERA Co., Inc. All Rights Reserved.

Past Performance© 2024 JERA Co., Inc. All Rights Reserved.

7

Performance to Date (Profitability)••

More profit was earned than planned. When resources price spiked during FY21-22, earned
profit significantly exceed the plan.
EBITDA has exceeded FY2025 target.

Net Income *1■Target■Target248.5(billion yen）

EBITDA *2(billion yen）

■Actual■Actual200.3

FY2019-2023 Total
Target: 550.0
Actual: 799.4

591.5
200.0

2019

500.0

111.6110.0
100.0

2020

Japanese
GAAP

569.7

148.7
140.0

100.0
90.0

574.0

2021

359.3
292.8

100.0

2022

2023

ＩＦＲＳ

2025 （FY）

2019

2020

Japanese
GAAP

2021

2022

2023

2025 （FY）

ＩＦＲＳ*1 Profit excludes profit time lag
Profit targets are business plan figures published in April 2019 for FY2019-2021, figures published in October 2022 for FY2022, and new management target figures published in May 2022 for FY2023-2025*2 EBITDA = Pre-tax profit excluding profit time lag + depreciation & amortization + paid interest
EBITDA target is new performance indicator announced May 2022

© 2024 JERA Co., Inc. All Rights Reserved.

Performance to Date
（Capital Efficiency, Growth Potential）••

8Although ROIC varied from year to year, steady progress was made toward the FY25 target ofaround 4.5%.
Investment CF was planned to be slightly less than 3 trillion yen over 7 years starting in 2019, andhas been largely in line with the plan while maintaining a balance between growth and discipline.

ROIC *1

Investment cash flow
■Target(billion yen)(%）

■Actual1,450.0

7.0%

1,400.0
1,242.8

4.8%2025 target
Approx. 4.5％

4.1%

4.0%

528.4

3.3%

2019

369.4

2020

Japanese
GAAP

*1

2021

2022
ＩＦＲＳ

2023

（FY）

Indicator Performance

2019-21 cumulative
Japanese
GAAP

2022

2023

Target （FY）
2022-25 cumulative

ＩＦＲＳ

ROIC = (profit excluding profit time lag+ interest paid x(1-effective tax rate)) / (interest-bearing debt + shareholder’s equity)
Interest-bearing debt and shareholder’s equity are averages at start and end of term, while interest-bearing debt is net of cash excluding operating capital,
effective tax rate is company effective tax rate (referencing values in securities report)© 2024 JERA Co., Inc. All Rights Reserved.

9Performance to Date (Financial Soundness)•Net DER has been in the transition at a level that meets the FY25 target.
However, we will continue to focus on financial soundness in preparation for rapid changes inthe external environment.

Net DER *1

Net Debt / EBITDA（x）（year）

1.3

1.02025 targetBelow 4.5

2025 target
Below 1.0

0.7
3.7

3.6
0.60.620192020
JapaneseGAAP

2021

2022

2023 （FY）

ＩＦＲＳ

3.7
2.92.820192020
JapaneseGAAP

2021

20222023 （FY）

ＩＦＲＳ

*1 Net DER = (interest-bearding debt – cash) / shareholder’s equity
Shareholder’s equity= Net Assets - Non-controlling interests© 2024 JERA Co., Inc. All Rights Reserved.