Itochu Corporation · TSE:8001
Itochu — Q4 2021 Earnings Presentation
22 slides from Itochu's earnings presentation, May 12, 2021
Slide 1: FYE 2021 Business Results Summary & FYE 2022-2024 Medium-Term Management Plan
FYE 2021 Business Results Summary & FYE 2022-2024 Medium-Term Management Plan Y bk \ /TOCW I am One with Infinite Missions ITOCHU Corporation May 10, 2021
Slide 2: President & COO Keita Ishii
President & COO Keita Ishii
Slide 3: FYE 2021 net profit exceeded the JPY400 billion target
By minimizing the COVID-19 impact, eliminating the management issues and preparing the structure for FYE 2022, we exceeded the consolidated net profit target of JPY400 billion set at the beginning of the year and reached JPY401.4 billion. Despite a tough business environment where other companies sa
Slide 4: Target of JPY600 billion net profit and business transformation
Our quantitative target is to aim to achieve consolidated net profit of JPY600 billion and growth strategy to realize business transformation by shifting to a market-oriented perspective and to enhance our contribution to and engagement with the SDGs. Global spread of COVID-19 brought major changes
Slide 5: FYE 2022 net profit plan set at record high JPY550 billion
Our consolidated net profit plan for FYE 2022 is set at a record high of JPY550 billion in order to ensure the return to the growth trajectory beyond the pre-COVID-19 profit level. We will overcome the pandemic and start our journey towards growth once again. 5
Slide 6: Dividend of JPY88 for FYE 2021, minimum JPY94 for FYE 2022
FYE 2021 yearly dividend is JPY88 per share, as announced. As for FYE 2022, through steady increases, we have set a minimum dividend per share of JPY94. We will increase the dividend if we make an upward revision during the FYE 2022. We also aim to reach a dividend of JPY100 per share during the med
Slide 7: FYE 2021 summary and commitment achievement
Looking at the FYE 2021, we needed to take some major accounting measures in relation to the impact of COVID-19 as well as the reduction of GHGs, but we achieved our commitment target. In the Brand-new Deal 2023, we announced JPY600 billion of net profit for the first time among the trading companie
Slide 8: FYE 2021 net profit and core profit versus forecast
For the FYE2021 net profit attributable to ITOCHU was JPY401.4 billion. As for the core profit, it was JPY452.5 billion. There was minus JPY51 billion of extraordinary gains and losses. In Q4, there was a JPY94 billion net based extraordinary loss. For the full year, it was JPY51 billion. We have co
Slide 9: Net profit attributable to ITOCHU by segment
The net profit attributable to ITOCHU by segment, there was a major extraordinary loss booked in Q4. Excluding “Others, Adjustments & Eliminations(including CP and CITIC)”, in all segments, profit declined. The positive core profit increase year on year was shown in the Metals & Minerals, Energy & C
Slide 10: Net extraordinary loss of JPY51 billion
Net extraordinary loss was JPY51 billion. In terms of the gross basis, the loss was JPY156.5 billion. In the Q4, the net number was JPY94 billion. The gross number was JPY125 billion. In preparation for the business environment with the COVID-19 impact and the reduction of the GHG and the changes of
Slide 11: COVID-19 impact of JPY56 billion
In relation to the COVID-19 impact, JPY56 billion was the impact. The sales of the apparel and lower car trade and also the aircraft business was weaker. Also, the CVS and restaurants business were impacted. Especially, the 8th Company impact was about JPY20 billion. In Machinery, JPY16 billion was
Slide 12: Cash flows from operating and investing activities
Cash flows from operating activities were JPY895.9 billion, which is the record high. With the delisting of FamilyMart, on a net basis, there was an outflow of JPY516.9 billion. Net investment cash flow was minus JPY755 billion, which is a record high number. After the shareholder return, we would l
Slide 13: Shareholder returns and share buybacks
In relation to the shareholder returns, although the free cash flow was negative, we made major investments, and we increased the dividend payment by JPY3 per share to JPY88 per share. The dividend has been increasing in the past 6 years in a row. With investments and higher dividend and high stock
Slide 14: Major new investments and exits
The total major new investments were JPY850 billion based on the growth, and a net investment amount of JPY755 billion in FYE2020. And out of this, about 86%, are in the consumer-related sector. The major ones are JPY516.9 billion of the additional investments to FamilyMart, JPY165 billion of the CA
Slide 15: Financial health and shareholders' equity
We did have a major impairment loss, but we maintained the financial health. As for some of the challenges, we would like to increase the shareholders' equity further, and we have taken measures for the goodwill and intangible assets. But in our balance sheet, we need to continuously watch the goodw
Slide 16: Mid-term plan target and GHG emission goals
After achieving the record high net profit number in FYE2022, we aim to achieve the consolidated net profit of JPY600 billion during the mid-term business plan. At the same time, we set a goal to attain 0 GHG emission in advance to the global target in 2030 & 2050. To accomplish this, we will transf
Slide 17: GHG emission reduction road map to net zero by 2050
As for the GHG emission reduction, this is the road map in achieving the net 0 GHG emission by 2050 to comply with the Japanese government target to reduce it by 40% in 2030 and reduce it by 75% by 2040. Now, the highlight here is that the GHG emissions of the ITOCHU Corporation, in addition to Scop
Slide 18: GHG emissions and withdrawal from thermal coal
The GHG emission in FYE2019 was 37 million tons. With the withdrawal from Drummond, we could reduce the emission by 16 million tons. 21 million tons of the GHG emission in FYE 2022 includes the emission from customers’ incineration, in which half of the emission comes from coal portfolio, including
Slide 19: FYE 2022 profit increase through Non-Resources
By increasing the profit of Non-Resources, we would like to achieve the 37% profit increase to achieve the JPY550 billion profit. If we are to make the upward revision during the year, we will be increasing the dividend payment from the minimum level of JPY94 per share. 19
Slide 20: FYE 2022 assumptions: exchange rate, crude oil, iron ore
We have some assumptions. The exchange rate of JPY105 to USD1, and crude oil Brent is USD60 per barrel. As for the iron ore price, we have a conservative view, and there is a strong demand for iron ore in China and crude still is very brisk. But since the government is controlling the supply and dem
Slide 21: FYE 2022 core profit increase breakdown
There was more than JPY50 billion in extraordinary losses last year so that the core profit in FYE2022 started with JPY450 billion, and we expect about a JPY60 billion increase. In Metals & Minerals, approximately JPY19 billion; Food, approximately JPY11 billion; ICT & Finance, approximately JPY8 bi
Slide 22: FYE 2022 shareholder returns and progressive dividend
As for the shareholder returns, JPY94 per share; that is up by JPY6 per share compared to FYE 2021. If we make the upward revision during the year, we will increase this. In fact, we have made an upward revision 3 times in the past 10 years, and each time we increased the dividend payment. We would