To Our Shareholders

We would like to take this opportunity to thank our shareholders and other investors for their continued generous support.

JXTG Holdings made steady progress due to an accumulation of integration synergy effects and a favorable business environment in fiscal 2017, the first year of the FY2017-FY2019 Medium-Term Management Plan. However, we foresee a structural decline in the demand for domestic petroleum products and intensified competition in the global market. For the JXTG Holdings Group’s sustained growth under these circumstances we are strongly aware of the necessity to persevere with cost cutting to strengthen competitiveness and structural reforms under the basic policy of the medium-term management plan’s three main objectives to "enhance the profitability of core businesses," "focus on cash flow and capital efficiency," and "strengthen the business foundation."

In the Energy Business, JXTG Holdings worked for the rapid materialization and maximization of integration synergies, strengthened competitiveness of the core petroleum refining and marketing and chemicals businesses, and developed and reinforced new businesses such as gas and electricity to become pillars for the next generation. In the oil exploration and production business, we rigorously engaged in selection and concentration to optimize the asset portfolio and cut costs with the intent to build a robust framework to raise earnings in an environment of low oil prices. In the metals business, we raised operational efficiency and reduced costs in the upstream mining business, and worked to nurture and reinforce business centered on the electronic materials sector where demand is expanding due to the rapid development of IoT and AI.

The JXTG Holdings Group formulated the JXTG Group Philosophy when it integrated management. This Group Mission Statement is comprised of a mission and our five core values, working for both social and economic value taking into account ESG at a time when there is a global movement toward a low-carbon or no-carbon society, as well as aiming for sustainable development of communities and a vibrant future.

As the world and the era undergo significant changes, the JXTG Holdings Group will continue to transform and take on challenges while determined to become one of Asia’s largest integrated energy, resources and materials company groups while being globally competitive.

We ask for your continued support and understanding as we endeavor to reach our goals.

December 2018

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