Management Policy

Management Plan

Status of Progress in Addressing the Medium-Term Management Plan and Future Initiatives

The J-POWER Group established a Medium-Term Management Plan in July 2015 to tackle the challenge of achieving further growth over the next decade. Three years have now passed since we formulated the plan. In April 2018 we took this opportunity to review the progress of our initiatives thus far and establish new targets and initiatives for the coming three years.

Initiatives of the J-POWER Group

The Medium-Term Management Plan sets three key concepts based on the business environment surrounding the J-POWER Group.

The business environment surrounding the J-POWER Group

Intensifying market competition stemming from reforms of the electricity system
Uncertainty surrounding nuclear power policy
Climate change (environmental regulations)
Robust growth in electric power demand centered around developing countries

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Key Concepts

Realize growth in Japan by "Surviving the Competition in a Liberalized Market"
Enhance "Overseas Business Expansion"
Further promote "Low-carbon Technologies" enabling greater business growth globally

The changes in the environment surrounding the J-POWER Group are taking place faster and on a greater scale.
In this environment, we will advance the following initiatives to achieve our growth focusing on the key concepts.

Future Initiatives of the J-POWER Group

Further expansion of renewable energy

FY2025 Target
New development on a 1GW scale
[Hydroelectric, 0.3TWh/year increase*; wind and other, 2.5TWh/year increase*]
* Comparison with FY2017
Strive toward zero emission in coal use
Promotion of the Ohma Nuclear Power Plant Project, with safety as major prerequisite
Expansion of overseas business
Value maximization of existing assets

Growth and Soundness Indicators

We use J-POWER EBITDA* as an indicator of growth and interest-bearing debt/J-POWER EBITDA as an indicator of soundness.
Our medium-term management plan established in 2015 targeted an increase in J-POWER EBITDA to 1.5x the FY2014 level by 2025. The plan also aimed to improve the soundness indicator (/J-POWER EBITDA) from the FY2014 level by the end of FY2025.
In April 2018 we established a 3-year forecast from FY2018 to FY2020 to accomplish these targets.

* J-POWER EBITDA= Operating income + Depreciation and amortization + Equity in earnings of affiliates

Results at the end of FY2014

Growth Indicator: 181.8 billion yen
Soundness Indicator: 9.5x

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3-year forecast and result from FY2015 to FY2017: [Forecast]
Growth Indicator: 3-year average of 185 billion yen/year
Soundness Indicator: The result at the end of FY2017 is maintained at the same level recorded at the end of FY2014 (9.5x); [Result] reached the forecasts for both indicators
Growth Indicator: 186.7 billion yen/year (3-year average from FY2015 to FY2017)
Soundness Indicator: 8.0x (results at the end of FY2017)

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3-year forecast from FY2018 to FY2020: Growth indicator: 210 billion yen or more in FY2020
Soundness Indicator: The result at the end of FY2020 is maintained at the same level recorded at the end of FY2017 (8.0x)

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Targets for FY2025: Growth target: The result in FY2025 rises to around 1.5 times the FY2014 level
Soundness target: The result in FY2025 is improved from the FY2014 level

Growth of Power-Generation Assets

Power generation capacity:30 GW
(FY2025 target)

Returns to Shareholders

While there continue to be areas of uncertainty in its business environment, the J-POWER Group has formulated a new shareholder return policy in April 2018 in anticipation of changes in the business environment such as progressing liberalization in Japan.
There will be no change in the basic emphasis on continuing to provide stable dividends while keeping a certain pay-out ratio in mind. Based on changes in our earnings structure, we aim to continue providing returns commensurate with our profit level while maintaining an appropriate balance of shareholder returns, business assets formation, and financial soundness.
We will continue to sustainably increase our corporate value and strive to enhance returns to shareholders as a result of our growth.

Concept of Returns to Shareholders

Taking into account factors such as the level of profit, earnings forecasts, and our financial condition, we strive to enhance stable, ongoing returns to shareholders in line with a consolidated payout ratio of around 30%, disregarding factors that cause short-term profit fluctuations.