Supporting Material for First Quarter Results 2013

Supporting Material for First Quarter Results 2013

Showa Shell Sekiyu K.K.1

7 May 2013

Showa Shell Sekiyu K.K.

This document contains forward-looking statements concerning the

results of operations and businesses of Showa Shell Sekiyu K.K..

Forward-looking statements are statements of future expectations that are

Notes


based on management’s current expectations and assumptions and

involve known and unknown risks and uncertainties that could cause

actual results, performance or events to differ materially from those

expressed or implied in these statements.

Highlights of Financial Results, Jan-Mar 2013� Crude Oil Price & Exchange Rate

2012 2012Results 2013 ResultsResults Jan - Mar Jan - Mar

Dubai crude oil price （USD/bbl） 109.0 116.5 108.1

（\/USD） 79.8 79.4 92.5

（\/EUR） 102.6 104.1 122.1 Exchange Rate

� Highlights of Financial Results 2012 Results 2013 Results

Jan - Mar Jan - Mar

Sales 700,725 759,275 58,549 +8.4%

Changes vs. 2012 (％) (million yen)


Sales 700,725 759,275 58,549 +8.4%

Operating income 14,157 37,209 23,052 +162.8%

Non-Operating income 26 -657 -684 -

Ordinary income 14,183 36,552 22,368 +157.7%

※Inventory valuation 10,032 18,658 8,626 +86.0%

※CCS ordinary income 4,150 17,893 13,743 +331.1%

Extraordinary income 821 2,853 2,031 +247.3%

Net income 6,290 24,610 18,320 +291.2%

【【【【Notes】】】】CCS ordinary income（（（（ordinary income on Current Cost of Supply basis））））

：：：：Ordinary income based on the cost excluding inventory valuation effects.

Oil Energy Solution

Business Business

Sales 720,201 37,000 2,073 - 759,275

Operating Income 34,743 2,092 364 8 37,209

(million yen) Others ConsolidatedAdjustment

� 1Q 2013

� 1Q 2012Oil Energy Solution

Information by Business Segment, 1Q 2013


Oil Energy Solution

Business Business

Sales 684,816 13,745 2,163 - 700,725

Operating Income 21,176 -7,393 387 -12 14,157

(million yen) Others ConsolidatedAdjustment

・Oil Business： manufacturing and sales of oil products, such as gasoline, naphtha, kerosene, diesel oil, fuel oil, lubricants, LPG, bitumen,and chemicals

・Energy Solution Business： manufacturing and sales of solar cell modules and electricity

・Others： Leasing and administration of properties, construction works, sale and lease of auto accessories, etc.

Key Points of Financial Results（（（（Jan-Mar））））� Consolidated sales during this three-month period (1Q) in 2013 amounted to 759.2

billion yen (8.4% increase vs. 1Q 2012) and ordinary income was 36.5 billion yen

(22.3 billion yen of increase vs. 1Q 2012). Consolidated CCS ordinary income,

excluding inventory valuation impact, was 17.8 billion yen (up by 13.7 billion yen vs.

1Q 2012)

� Oil Business

✔Sales was 720.2 billion yen (up 5.2% vs 1Q 2012) and operating income marked 34.7

billion yen (up by 13.5 billion yen).



✔Compared with 1Q2012, severe winter in early part of 1Q2013 allowed us higher

margins and petrochemical product margins, such as mix xylene and benzene, were

also higher, so that CCS operating income of the oil business was up from 1Q2012.

� Energy Solution Business

✔Sales was 37.0 billion yen (up 169.2% vs 1Q2012) and operating income marked 2.0


✔As to Solar Business, a major part of Energy Solution Business, operating income largely

improved from 1Q2012 as a result of continuous efforts for production cost reduction

and sales expansion into the Japanese market.

Business Overview（（（（Jan-Mar））））� Oil Business

✔Overall domestic sales volume went lower than 1Q2012 results partly because 1Q this year had 1

day less than last year. Automobile fuel sales, such as gasoline and gas oil, slightly exceeded last

year, whereas kerosene and fuel oil A vulnerable to climate change resulted in weaker sales yoy.

✔Petrochemical products, such aromatics products as mix xylene and benzene, maintained higher

margins than last year due to tight market situations.

✔Product export volume surpassed last year particularly as we started aggressively exporting from

March in order to optimize domestic supply/demand balance.


� Energy Solution Business (Solar Business)

✔Kunitomi Factory kept running at full capacity throughout 1Q in order to meet surging domestic

demand.

✔Module shipment in 1Q2013 for the domestic market, where demand is rapidly increasing on the

back of new feed-in-tariff scheme for renewable energy, largely exceeded 1Q2012 . We are

receiving a large number of enquiries for our products from customers and spending utmost efforts to

provide our products to as many customers as possible when they need.

✔Module prices in both international and domestic markets almost unchanged from 4Q2012 as silicon

prices bottomed out and module supply in the domestic market became tight.

Ordinary Profit 2012 /1Q vs. 2013/1Q

(Unit: Billion Yen)

+18.6

▲▲▲▲0.6+8.7

+0.1+0.7

Ordinary income +22.3

CCS Ordinary Income

SolarBusiness

Othersetc. Non-ope.

**StockEffectetc.

OrdinaryIncome

ElectricPower

Business

Oil BusinessEnergy Solution

Business


1Q 2012 1Q 2013* CCS: Current Cost of Supply

** Including the effect of Lower of cost or market value method

17.8

4.1

14.1

36.5

+0.1+0.6

+8.7

+10.0

+4.1

CCS Ordinary Income+13.7

OrdinaryIncome

*CCS OrdinaryIncome

**StockEffectetc.

OilBusiness

Refinery costand M&A

Oil BusinessSubsidiaries

*CCSOrdinaryIncome

Crude oil refined and Sales volume

2012 2012Results 2013ResultsResults Jan-Mar Jan-Mar

Crude oil refined （thousand KL） 21,053 5,685 5,651

Refinery utilization rate （％） 91.6% 99.5% 100.0%

2012 ResultsJan-Mar Jan-Mar

Gasoline 2,158 2,139 - 0.9%

vs. 2012 (%) （thousand KL） 2013 Results

� Crude oil refined & Utilization rate

� Sales volume by products


Jet Fuel 535 496 - 7.3%

Kerosines 1,225 1,180 - 3.6%

Diesel Oil 1,215 1,254 + 3.2%

Fuel Oil A 532 505 - 5.0%

Fuel Oil C 483 432 - 10.5%

Others 1,112 1,071 - 3.7%

Total Domestic Sales 7,259 7,077 - 2.5%

Export 210 301 + 43.1%

Grand Total 7,469 7,377 - 1.2%

Forecast full year results for 2013

� Forecast of consolidated full year results 2013

2012 2013Results Forecast

Dubai crude oil price （$/B） 109.0 106

（Yen/$） 79.8 84

（Yen/EUR） 102.6 110Exchange rate

2012 2013Results Forecast

Net sales 2,629,261 2,710,000

million yen

� Crude oil price & Exchange rate

There is no change in the forecast which was published on Feb 14, 2013.


Net sales 2,629,261 2,710,000

Operating income 14,697 46,000

Oil business 28,128 43,500

Energy solution business -15,435 2,500

Others and adjustment* 2,004 -

Ordinary income 12,674 45,000

　　※Inventory valuation 1,450 0

　　※CCS ordinary income 11,224 45,000

Net income 1,013 26,000

*2013 forecast for others and adjustment is included in the Oil Business.

Data Book


Data Book

Quarterly trend of Ordinary incomeBillion yen

39.2

29.5

14.1

10.0

15.1

36.5

18.8

11.5 8.7

8.6

17.8

10

20

30

40

50

Ordinary Income

CCS Ordinary Income


-3.4 -3.5

-26.6

10.0 7.1

-7.4

4.1

-10.3

8.7 8.6

-30

-20

-10

0

10

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q

2011 2012 2013

Quarterly Trend of Operating Income by Business SegmentBillion yen

15.6 14.7

11.1 12.3

7.5

16.0

5

10

15

Oil business CCS operating income

Energy solution business operating income

23.4


1.6

-4.3 -5.6

-5.1

-8.7 -9.2 -7.3

-4.6 -3.5

2.0

-10

-5

0

5

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q

2011 2012 2013

0.1

(USD/bbl)

Crude oil price (Platt’s Dubai)

100.9

110.6

107.1 106.5

116.5

106.2

106.1 107.5108.1

100

110

120

130


50

60

70

80

90

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3

2013 1QAverage

108.1 USD/bbl

2012 Average109.0 USD/bbl

2011 Average106.3 USD/bbl

(JPY/USD)

Exchange rates (JPY/USD TTM)

92.5

90

95

100


82.381.7

77.9 77.4

79.4 80.2

78.6

81.1

70

75

80

85

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3

2013 1QAverage

92.5 JPY/USD

2011 Average79.8 JPY/USD

2012 Average79.8 JPY/USD

(JPY/EUR)

Exchange rates (JPY/EUR TTM)

112.7

117.4

110.2

104.3 104.1105.1

122.1

110

115

120

125

130


104.3 104.1102.8

98.3

85

90

95

100

105

110

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3

2011 Average111.1 JPY/EUR

2013 1QAverage

122.1 JPY/EUR

2012 Average102.6 JPY/EUR

25

30

35

40

60

80

100

国内国内国内国内マーケットのマーケットのマーケットのマーケットの状況状況状況状況①①①①（（（（ガソリンガソリンガソリンガソリン））））

Regular-Gasoline (Domestic Spot Price)

Crude & Product price ￥￥￥￥/L Spread￥￥￥￥/L

2011 2012 2013

Domestic Market (1) : Regular Gasoline


12.8 11.0

13.5 10.5

11.6

7.1

14.1

10.6 10.0

0

5

10

15

20

0

20

40

1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9 101112 1 2 316

Crude JCC

Spread （（（（Spot price-CIF））））

25

30

35

40

60

80

100

Domestic Market (2) : Diesel Oil

Spread￥￥￥￥/L

2011 2012

Diesel-Oil (Domestic Spot Price)

2013

Crude & Product price ￥￥￥￥/L


15.4 13.0

10.8 11.0

12.9

8.3

12.5 9.4 9.7

0

5

10

15

20

0

20

40

1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9 101112 1 2 317

Crude JCC

Spread （（（（Spot price-CIF））））

30

45

100

150

Global Market (1) : Diesel Oil

$/bbl Spread＄＄＄＄/ bbl

Diesel-Oil (Asian Spot Price) 2012

Dubai

20132011


18.2 19.5

17.6 17.8 16.4 15.4

19.3 17.5

19.6

0

15

0

50

1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9 101112 1 2 318

Spread （（（（Spot price – Dubai））））

900

1200

1500

900

1,200

1,500

Global Market (2) : Mixed Xylene

2011

$/MT Spread$/MT

2012

Mixed Xylene (Asian Spot Price)

2013

Dubai


359 427

522 444

498

382

462 548 538

0

300

600

0

300

600

1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9 101112 1 2 319

Spread （（（（Spot price – Dubai））））

1Q 2013 -Topics-Conversion efficiency world record for thin-film without cadmium 【【【【Jan】】】】

Solar Frontier achieved 19.7% of energy conversion efficiency with 0.5 cm2 cell. This is the world record for thin-film cell without cadmium. This record suggests high potential for deployment of this technology to larger-sized modules since this small cell was cut out from 30cmx30cm aperture area CIS sub-module. This is the record nearing the world record of 20.3% in the arena of all thin-film solar cells including the one with cadmium.

Establishing joint investment company with Development Bank of Japan(DBJ) 【【【【Jan】】】】

Solar Frontier entered into agreement with DBJ to establish a joint investment company for facilitating large-scaled solar power plant (mega-solar) development. The joint company aims to fund totaling 100MW of solar projects in Japan for the time being and also supports various types of solar projects,

Atsugi Research Center

Showa Shell Sekiyu K.K. 20

100MW of solar projects in Japan for the time being and also supports various types of solar projects, assuming projects having secured lands but not been financed yet and those with less than 2MW capacity which tend to face hardship in securing finance. Solar Frontier will move forward with this BOT business model in which it will be engaged in a wide range of services from plant engineering to plant operation and further to selling those plants to end-users or investors.

(The joint company called “SF Solar Power” was established in Mar and has launched its first business by developing about 11.6MW of solar power plant at the site of Kansai International Airport.)

Agreement to seek synergy opportunities in oil product supply 【【【【Mar】】】】

In order to establish more stable and efficient crude oil shipping and product supply under the fast-moving business environment, we have concluded a basic agreement with Tonen General Sekiyu K.K. to seek synergy opportunities in the following 4 areas. These areas are increased synergy effects for feedstock in the Kawasaki refineries, joint operation of crude vessels, joint operation of depots/terminals, and domestic marine transport of oil products and products exchange.

Supporting Material for First Quarter Results 2013

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