Mitsubishi Corp Ord

Hello, everyone. This is Tarada from IR. I'm the GM. Thank you for your valuable time today, despite your busy schedules. As it's time now, we would like to start Mitsubishi Corporation's Fiscal 22 Q3 results briefing. First, let me introduce who is here with us from our side. We have Representative Director EVP and CFO, Yuzo Nouchi. Also, the GM of Corporate Accounting, Yoshihiro Shimazu. And myself, the GM of IR, Tatsuhiko Terada. We have three of us here. We'd like to now start. Over to you, Mr. Nouchi. This is Nochi, the CFO. Thank you very much for taking time out of your busy schedule today to participate in our fiscal year 22 Q3 results call. First, I will explain the progress of the midterm corporate strategy 2024, including the highlights of the financial results for fiscal 22 Q3. Thank you very much. which used to be separately posted on our website. The contents corresponding to the conventional supplementary information materials are under supplementary information for consolidated financial statements and supplementary information by segment, but I will not be explaining them at this time. Now, please turn to page 3, which is numbered at the bottom right. First, I'll explain the summary of this quarter's financial results. Consolidated net income for fiscal 22 Q3 increased by 311 billion yen from 644.8 billion yen in the same period last year to 955.8 billion yen. We were able to exceed last fiscal year's full-year record high profit of 937.5 billion as of Q3. Additional commentary by segment will be provided later by Mr. Shimazu. In addition to the steady progress leading up to Q3, we have also felt good response in Q4. Therefore, we have revised our full-year forecast upward from 1 trillion 30 billion yen announced in November to 1 trillion 150 billion yen, a 120 billion yen increase from the previous forecast. Despite headwinds such as inflationary cost increases, we recognize that profitability is steadily improving. Regarding shareholder return, we have raised our dividend forecast by 25 yen to 180 yen per share from the November forecast, and we will implement an additional share buyback of up to 100 billion yen. Next, on page 4, which is numbered at the bottom right, I'll provide a supplementary explanation of progress toward the profit targets in the midterm corporate strategy 2024. please refer to the dark blue portion of the bar graph on the bottom half of the slide. Under Mid-Term Corporate Strategy 2024, for this fiscal year's target of profit excluding price factors, we have revised up the target to 730 billion yen, an increase of 80 billion yen from 650 billion yen, which was the outlook at the beginning of the year. We expect profit growth in automotive and mobility, industrial materials, and other segments, and we have reversed our risk buffer of 40 billion by 30 billion, taking into account the reduced uncertainty in the remaining period of the fiscal year. Toward achieving our goal of 800 billion yen in fiscal year 2024, the final year of the medium-term management plan, we will continue to maintain and expand our earning space and will also accelerate investment in EX, DX-related and growth areas. Please refer to page 5 on the bottom right. Now, I would like to explain our progress as of fiscal 22 Q3 toward the cash flow allocation plan set forth in the Midterm Corporate Strategy 2024. Cash inflow for the period was 1.5 trillion yen, consisting of 1 trillion yen in cash flow from underlying operating cash flows and 0.5 trillion yen in cash flow from divestments. On the other hand, cash outflows included investments of 0.6 trillion, resulting in an adjusted free cash flow of 0.9 trillion yen. Shareholder return that has been announced up until today, a free cash flow of 0.9 trillion yen, will be appropriately allocated to investments in growth to enhance corporate value and additional shareholder returns while maintaining financial discipline.

Page 6, please. We plan to invest approximately for the medium term under midterm corporate strategy 2024. We plan to invest approximately 3 trillion yen over the next three-year period, of which approximately 0.6 trillion yen has been already executed. Major investments include in the area of maintenance and expansion of earning space, approximately 0.4 trillion yen invested in Australian meteorological coal and lawson-related businesses, and in the EX-related area, approximately 0.2 trillion yen invested in the Kejabeco copper mine and in the Eneco-related power generation business. Page 7, please. I will explain progress on the growth strategy defined as part of the Midterm Corporate Strategy 2024. In the past nine months, in addition to the maintenance and expansion of the ironing space, we had progress in the areas of EX-related, DX-related, and the regional community revitalization. A major progress was an acquisition of a new offshore wind power generation business right in northwestern Netherlands through ENECO during Q3. Lastly, I will explain about shareholder returns on page 8. In line with the targeted total payout ratio of 30 to 40%, defined under the Midterm Corporate Strategy 2024, we set the total return to shareholders at approximately 430 billion yen, taking into account financial soundness and market expectations for shareholder returns. we are increasing annual dividend to 180 yen per share, reflecting the steady growth of earnings. In addition, we have also decided to buy back shares worth up to 100 billion yen, which explains the difference between the dividend and the 70 billion yen share buyback announced in November. Progress on quantitative targets is summarized on next page, page 9. Please refer to it later. This concludes my brief explanation. Next. The business conditions are still unclear because of the slowdown in the world economy. We would like to accelerate our initiatives and increase the efficiency of the asset. and increase the corporate value over the mid to long term. This concludes my brief explanation. Next, Mr. Shimazu, General Manager of the Corporate Accounting, will go through details.

Hello, this is Shimazu, GM of the Corporate Accounting Department. I'd like to make a few supplementary comments on the detailed result for the first nine months of fiscal 22. First, I'll explain Q3 results by segment. Please refer to page 11, shown at the bottom right of the document. In Q3 of this fiscal year, 7 out of 10 segments reported year-on-year increases in operating income. or net income. I will now explain the segments with the largest increase in profit. First, natural gas. The first item from the top on the left side of the slide showed an increase of 30.5 billion yen from the same period of the previous year, mainly due to a decrease in dividend income in the LNG-related business and an increase in equity earnings of LNG-related businesses, despite the impact of losses on transactions in the marketing business. Mineral resources. net income increased 137.1 billion yen year-on-year, mainly due to higher market prices in the Australian coking coal business. Now, moving on to the right half of the document, automotive and mobility recorded an increase of 33 billion yen from the same period of the previous year, mainly due to increased equity in earnings of the ASEAN Automobile Business and Mitsubishi Motors Corporation. Finally, urban development, which recorded gains on the sale of a real estate management company in the first quarter, reported an increase of 86 billion yen from the same period of the previous year. Next, I'd like to explain the outlook by segment. Please refer to page 12 on the lower right.