Idemitsu Kosan Co. (5019) Status update summary

Management philosophy and review of FY2023-2025

• Emphasizes empathy, integrity and solidarity, serving communities and stakeholders while fostering continuous improvement and overcoming challenges together.

• Exceeded operating and equity income and ROE targets, supported by petroleum and functional materials profits; crude oil price volatility remained a challenge.

• Human capital efforts embedded the management philosophy, DE&I and individual potential, with new guidelines established.

• Improved ROIC in petroleum and functional materials, while power/renewable energy and basic chemicals faced challenges.

• Advanced carbon-neutral and circular businesses, including blue ammonia, e-methanol, SAF and chemical recycling.

Strategic direction and business environment

• FY2026-2030 maintains the existing vision while rebalancing strategies for greater uncertainty and stronger practical earning power.

• Energy security risks, supply chain disruptions and calls for enhanced corporate value shape the business environment; fossil fuel demand remains uncertain amid policy and technology shifts.

• Scenario planning considers both high- and low-decarbonization futures, emphasizing strategic flexibility.

• The plan integrates business, human capital and business platform to strengthen growth power.

FY2026-2030 targets

• Targets IFRS-basis ROE of 12% in FY2027-2028 and 13% in FY2030, plus ¥360bn profit before tax excluding financial expenses.

• Targets ROIC of ≥7% by FY2030.

• Three strategic pillars: strengthen existing businesses (GRIT), create growth businesses (GROWTH), and scale low-carbon and decarbonization businesses (CNX).