JGC Report 2020 MISSIMISSIONON DRIVEN.DRIVEN

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JGC Report 2020 MISSIMISSIONON DRIVEN.DRIVEN AprilApril 1, 2019 1, 2019 - March - March 31, 202031, 2020 JGC Report 2020 JGC Report MISSIMISSIONON DRIVEN.DRIVEN. 2-3-1,2-3-1, Minato Minato Mirai, Mirai, Nishi-ku, Nishi-ku, Yokohama Yokohama 220-6001, 220-6001, Japan Japan Tel:Tel: 81-45-682-1111 81-45-682-1111 Fax:Fax: 81-45-682-1112 81-45-682-1112 www.jgc.comwww.jgc.com JJGCGC ReportReport 20202020 Founding Aspirations, Pursued to this Day In Every Era, Aiming to Support the Foundations of Industry and Society at Large In 1928 founder Masao Saneyoshi established Japan Through consistent growth and expansion after focusing Gasoline Co., Ltd., predecessor of the JGC Holdings Corpo- on EPC Services in the 1950s, founding aspiration have ration. What drove him to seek an abundant, low-cost been passed down to each employee as the Group devel- supply of oil for Japan was the belief that domestic produc- oped operations in a Total Engineering segment for tion of gasoline - for which imports were surging since the Overseas Oil and Gas, Overseas Infrastructure, and Great Kanto Earthquake - was indispensable to the nation's Domestic EPC and Maintenance, as well as a Functional development. Materials Manufacturing segment in Japan. The JGC Group will continue to grow by helping to build a sustainable society and contributing to solutions for global issues. News of the company's founding (as published in the predecessor of The Nikkei, October 11, 1928) Founder of JGC Group Masao Saneyoshi Corporate Philosophy Values JGC Way We are driven by our shared values and commitments. The corporate philosophy of the JGC Group, the “JGC Way,” is the fundamental platform pursuant to which the business activities These elements express our strengths and represent the basis for how we work and deliver solutions to our clients and stakeholders: of the group are promoted and furthermore is followed by each and every JGC Group employee and executive in their activities. Shared Values Challenge We venture into new business elds, overcome technical hurdles and establish innovative methodologies. Create We remain dedicated to developing results-focused, thoughtful solutions that fully meet the needs of our clients and benet society as a whole. Mission Integrate We bring together a wide range of technologies, innovative tools and a diverse team dedicated to increasing value to all stakeholders. We are committed to creating a more prosperous future for our clients, for people and for society through Deliver We commit to overcoming obstacles through diligence and our “never-give-up” philosophy, and to delivering quality products and services to our clients and society. integrating our core capabilities and technical expertise to generate innovative solutions. Professional Respect We undertake to foster mutual respect and support among all those involved in our activities Commitments and to emphasize the importance of safety for all. Integrity We pledge to maintain the highest ethical standards in everything we do. JGC Group Corporate Slogan Vision The corporate slogan embodies the JGC Group's strong desire to contribute to the resolution of increasingly complex issues around the world through its business activities, including the full range of EPC services, functional materials manufacturing, and consulting. We create new value and solve problems for our clients and society by utilizing our technical skills in the elds of engineering and functional materials. 1 JGC Report 2020 JGC Report 2020 2 CONTENTS Founding Aspirations, Corporate Philosophy 1 CONTENTS, Editorial Policy 3 CHAPTER 2 CHAPTER 3 CHAPTER 4 CHAPTER 5 CHAPTER 6 JGC Group Value Creation Materiality Initiatives Foundation for Creating Value Core Competencies and Business Outlook Management Resources CHAPTER 1 Toward Sustainable Growth JGC STORY Societies in Harmony with Environment 37 Messages from Outside Directors 47 ■ Core Competencies Total Engineering Business 81 Working with Local Communities Around the World 39 Corporate Governance 50 Core Competencies 67 Functional Materials Manufacturing Business 84 1 Growth Trajectory 21 Human Rights, Employee Motivation 40 Quality Management System 58 Project Execution Capabilities 69 2 JGC Group Materiality 23 Energy Access 41 Compliance 59 3 Value Creation Process 25 Quality of Life 42 Risk Management 61 ■ Management Resources 4 JGC Group’s Business 27 Message from CEO 7 Ensuring Occupational Health and Safety 43 Management Structure 63 Human Capital 74 5 Roadmap to the Sustainable Growth 29 Message from COO 11 ESG Data Highlights 44 Dialogue with Shareholders and Investors 64 Social and Relationship Capital 76 Message from CFO 15 Highlights 1 Manufactured Capital 78 Financial Highlights 17 Accelerating Commercialization of Environmental Data Section 85 Technologies 31 Highlights 2 Business Innovation through Digital Transformation 33 Information Provided About Us https://www.jgc.com/en/about/ Narrow Editorial Policy at investors) (Primarily aimed ・Message from Top Management ・Corporate Philosophy Purpose of This Report Information Provided JGC Report ・Group Companies The purpose of the JGC Report, which was rst published in 2015, is to The JGC Report summarizes and presents the most relevant information related (Integrated Report) ・History explain to stakeholders how the JGC Group works to generate sustainable to the JGC Group and society. For detailed and comprehensive nancial and Target ・JGC Group at a Glance growth and increase corporate value over the medium to long term. JGC uses non-nancial information about the Group, please visit the JGC website. this report as a tool to communicate with stakeholders as part of its efforts to Sustainability JGC Website https://www.jgc.com/en/esg-hsse/ deliver sustainable growth through continuous, constructive dialogue. Forward-looking Statements Broad ・Environmental Initiatives Data and forecasts disclosed in this report are based on judgments and ・Social Initiatives Organizations Covered in This Report information available at the time of publication. The Company provides no ・Governance In this report, "JGC Group" and "the Group" refer to "JGC Holdings Corpora- guarantee for targets, forecasts and earnings projections, which may change Detailed Critical tion" and its subsidiary operating companies. due to a range of factors. (Comprehensive) Content Period Covered Reference Guidelines Investor Relations https://www.jgc.com/en/ir/ In principle, the report covers the period April 2019 to March 2020 The JGC Report 2020 was compiled referring to the ・IR Calendar (scal 2019), but also includes information related to events from disclosure framework of the International Integrated ・Financial Statements-Summary April 2020. Reporting Council (IIRC) and the World Intellectual Capital/As- ・Medium-Term Business Plan sets Initiative (WICI), as well as Guidance Supplement of the ・Fact Sheet Ministry of Economy, Trade and Industry (METI). 3 JGC Report 2020 JGC Report 2020 4 CHAPTER 1 Toward Sustainable Growth In this chapter, the JGC Group's business environment and progress in growth initiatives are discussed by the chairman and president, with insight on nancial strategy from the chief nancial ofcer. 07 Message from CEO 11 Message from COO 15 Message from CFO 17 Financial Highlights 5 JGC Report 2020 JGC Report 2020 6 Toward Sustainable Growth CHAPTER 1 Toward Sustainable Growth Message from Our Third Transformation for Sustained Growth CEO 1 Dual challenges of 2020 2 Long-term vision behind the next medium-term business plan Many aspects of society, industry, and everyday life have suffered a tremendous impact from the new coronavirus As of October 1, 2019, the JGC Group adopted a holding pandemic (“Covid-19”) since the beginning of this year. The company structure. We had struggled for years to develop world as a whole now faces an unprecedented situation. It only a diversified business portfolio that does not rely solely on reinforces my strong impression that we are living in VUCA overseas oil and gas, having faced turbulence about once every times, in a situation of Volatility, Uncertainty, Complexity, and decade in the natural resource market. Our total engineering Ambiguity. business now serves three segments; besides overseas oil Representative Director, Chairman, We have seen a complete reversal in the plant market which and gas, we are also targeting overseas infrastructure and and Chief Executive Officer until 2019 had been recovering but now seems uncertain. domestic EPC, as well as functional materials manufacturing. Masayuki Sato Given that oil prices have dropped sharply from a failure of This gives the Group an updated management structure for OPEC+ to agree on production cuts, and that Covid-19 has revenue from a multi-business portfolio. With this, we have Has worked in finance and accounting since joining JGC in 1979, overseeing finance for sapped energy demand, clients including oil majors have made fulfilled my commitment to establishing a permanent Group Middle East, North Africa, Southeast Asia, and the decision to reduce capital investment this year. This means management structure poised to build our second and third CIS projects. Appointed as a director in June 2010, CFO and that 2020 presents me with two challenges as CEO. Not only pillars of business after overseas oil and gas, as we pursue Managing Director, Senior General Manager must we grapple with somehow meeting our fiscal 2020 order continued growth and gains in corporate value. (Reference: of the Corporate Administrative & Financial Affairs Division in July 2011, and
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