Tokyo Gas : Management Vision(Compass2030·Compass Action)

Business Strategy

19 Tokyo Gas Group Integrated Report 2023

Introduction	Introduction
	Contents
CEO's	CEO's Message
Message
How	How We Create Value
We
The Value Creation Process
CreateValue	Promoting Sustainability and Material issues
	Business Strategy
	Compass2030 & Compass Action
Business	Compass Transformation 23-25
	Strategy 1: Achieve both stable energy
		supply & decarbonization
		Strategy 2: Fully roll out Solutions
Strategy		business
CFO's Message
		Strategy 3: Realize a flexible corporate
		culture resilient to change
	Introduction of Internal Companies
Corporate	Corporate Strategy
	Sustainability
Strategy	Corporate Governance
FinancialData	Financial Data
		Web Site
		Investor Relations Website
		Investors' Guide
		(Financial Data and Industry Data)
	Financial Results Presentation Materials
		Financial Results Bulletin
		Corporate Governance Report
		Sustainability Factbook

For achieving the Vision

Our Strategy

Compass2030 & Compass Action

On November 27, 2019, we announced our new management vision, "Compass2030," and on November 26, 2021, we announced Compass

Action to realize our management vision.

For half a century since LNG was first introduced in Japan, Tokyo Gas has led the expansion of this new energy and ushered in the era of natural gas. We are in the midst of a new era of transformation, including decarbonization, digitalization, changes and diversification of customer values, and progress in energy deregulation.

We aim to be a corporate group that continues to create value together with our customers, society and business partners while leading the next generation of energy systems by capitalizing on the strengths of the Tokyo Gas Group, which has revolutionized energy and taken on the challenge of realizing a sustainable society.

Management guidelines and results

Company portfolio in 2030: Profit level

Introduction	Introduction
Contents
CEO's	CEO's Message
Message
How	How We Create Value
We
The Value Creation Process
Create Value	Promoting Sustainability and Material issues
Business Strategy
	Compass2030 & Compass Action
Business	Compass Transformation 23-25
Strategy 1: Achieve both stable energy
supply & decarbonization
Strategy 2: Fully roll out Solutions
business
Strategy
Strategy 3: Realize a flexible corporate
culture resilient to change

	FY2022 results	2030
operating profit + equity	¥417.0 billion	Approx. ¥200.0 billion
income of subsidiaries
CO2 reduction contribution (base year:	6.35 million tons	17.00 million tons*1
FY2013)
Renewable power source	1.633 million kW	6.00 million kW*2
transaction volume (FY-end)
No. of customer accounts	13.00 million	20.00 million
(FY-end)
Natural gas transaction volume	19.00 million tons	20.00 million tons
(FY)

Overseas*3	Approx. ¥200.0 billion
Solutions, etc.*4
Energy*5 (gas + electricity + networks)		25%
Approx. ¥120.0 billion		25%
		50%
At the time of formulation of the management vision in 2019	2030

	Introduction of Internal Companies
	CFO's Message
Corporate	Corporate Strategy
Sustainability
Corporate Governance
Strategy
Financial	Financial Data

*1 The Compass2030 initial target: 10 million tons (Japan only) *2 The Compass2030 initial target: 5 million kW *3 All overseas businesses *4 Energy-related, real estate, other *5 Domestic gas, electricity, and network businesses

	Three challenges for achieving the Vision
Lead transition to Net-Zero CO2	Establish a value co-creation ecosystem	Transform the LNG value chain
01	02	03

20 Tokyo Gas Group Integrated Report 2023

Data
	Web Site
	Investor Relations Website
	Investors' Guide
	(Financial Data and Industry Data)
Financial Results Presentation Materials
	Financial Results Bulletin
	Corporate Governance Report
	Sustainability Factbook

Top leader at the forefront of the transition

Thoroughly use natural gas + develop practical CCUS*1 Strengthen gas-fired thermal power as balancer for renewable energy

Create value chain for e-methane*2

Form alliance for achieving low-cost, practical deployment of

hydrogen & carbon-neutral methane

Hydrogen: ¥30/m3 *3 or lower (2030)

Create renewable energy value chain leveraging

our Group's unique strengths

Establish revenue model that covers from power source

development, O&M*4 to renewable energy sales

Renewable energy transaction volume : 6 million kW (2030)

Energy market's digital marketing front runner

Nationwide operation as a digital marketer

(TG Octopus Energy Group Limited)

Use digital & face-to-face channels to increase retail power

contracts beyond 5 million in 2030

No. 1 player in customer satisfaction through

value co-creation at the last mile*5

Launch services in Kanto area that provide solutions to each type of lifestyle need, then expand nationwide via alliances

Provider of solutions for community challenges

Provide nationwide and global solutions for decarbonization

and strengthening resilience through coordination with local

government & businesses

Corporate culture that enhances the earning

power of each business

Enable more autonomous management of internal

companies and operating companies

Major realignment of management structure on a Group-wide level

Establish a business model that leads our market volatility

responsiveness toward the stabilization of earnings

Human resources system that encourages pursuit

of challenges in ways that leverage diversity

Employ and cultivate diverse human resources at each

internal company and operating company

Financial strategy that promotes growth investing

Step up investment in growth areas by selling/replacing assets

and boldly revamping cost structure

Introduction	Introduction
Contents
CEO's	CEO's Message
Message
How	How We Create Value
We
The Value Creation Process
CreateValue	Promoting Sustainability and Material issues

Challenges to accelerate for achieving the Vision

Responsibly lead the transition with gaseous	Accelerate value co-creation via digitalization	Improve each business's earning power and
& renewable energy	and reinforced face-to-face engagement	resilience to change
Mid-term management plan based on the Vision (Compass Transformation 23-25)New mid-termmanagement plan	p.22
01	02	03
strategy	strategy	strategy
Achieve both stable energy	Fully roll out Solutions	Realize a flexible corporate
supply & decarbonization	business	culture resilient to change

Major coefficients

Segment profits	ROA	ROE	D/E ratio	CO2 reduction contribution	Cumulative operating	Growth investments Infrastructure investments
cash flow

*1 Carbon capture, utilization & storage *2 Methane synthesized from non-fossil fuel energy raw materials (green hydrogen, etc.) *3 The hydrogen supply cost (CIF price) target set by the Japanese government. It is premised on a reduction in the cost of hydrogen production equipment, and achievement of low-cost renewable electricity made possible by factors such as growth of the renewable energy market. *4 Operation & maintenance *5 Technical work performed at customers' residences

21 Tokyo Gas Group Integrated Report 2023

	Business Strategy
	Compass2030 & Compass Action
Business	Compass Transformation 23-25
	Strategy 1: Achieve both stable energy
	supply & decarbonization
	Strategy 2: Fully roll out Solutions
	business
Strategy
	Strategy 3: Realize a flexible corporate
	culture resilient to change
Introduction of Internal Companies
CFO's Message
Corporate	Corporate Strategy
Sustainability
Corporate Governance
Strategy
Financial Data	Financial Data
		Web Site
		Investor Relations Website
		Investors' Guide
		(Financial Data and Industry Data)
	Financial Results Presentation Materials
		Financial Results Bulletin
		Corporate Governance Report
		Sustainability Factbook