Itochu Corporation · TSE:8001
Itochu — 1H FY2009 Earnings Presentation
36 slides from Itochu's earnings presentation, Nov 7, 2008
Slide 1: Investors Meeting (For 1st Half Business Results)
Fiscal Year Ending March 31, 2009 Investors Meeting (For 1st Half Business Results) November 7, 2008 Eizo Kobayashi, President and CEO
Slide 2: Agenda
1．Summary for the 1H of FY2009 ２．Segment Information (1H of FY2009) 3．Forecast for FY2009 (ending Mar 09) 4．Progress of Frontier+ 2008 5．Reference: Quarterly Information on Consolidated Operating Results © 1
Slide 3: Summary for the 1H of FY2009
Summary for the 1H of FY2009 9 Net income of 1st half of FY2009 increased by ¥22.2 billion to ¥139.2 billion compared with 1st half of FY2008, achieving a record high for 4 consecutive years. Increase Original plan for FY2009 1-2Q FY2008 1-2Q Progress (Decrease) FY2009 Gross trading profit 542.2 491
Slide 4: Net Income by Segments
Net Income by Segments 9 Significant increase in Energy, Metals & Minerals. 9 Profit increase of more than ¥10.0 billion in Consumer-related sector (Total of Textile, Food and Forest Products & General Merchandise). FY2009 FY2008 Increase Original plan for (Ended March 31) Progress 1-2Q 1-2Q (Decrea
Slide 5: Financial Position and Cash Flows
Financial Position and Cash Flows Financial position Increase Sep. 30, 2008 Mar. 31, 2008 (Decrease) Total assets 5,451.2 5,255.4 195.8 Net interest-bearing debt 1,711.2 1,654.5 56.6 Stockholders’ equity 1,022.2 978.5 43.7 Net DER 1.7 times 1.7 times Same level Cash flows FY2009 FY2008 Increase 1-2Q
Slide 6: Segment Information (1H of FY2009)
1．Summary for the 1H of FY2009 ２．Segment Information (1H of FY2009) 3．Forecast for FY2009 (ending Mar 09) 4．Progress of Frontier+ 2008 5．Reference: Quarterly Information on Consolidated Operating Results © 5
Slide 7: Textile
Textile Overview 【1-2Q】 Net income increased due to significant Gross trading profit Net income improvement of gain on disposal of 26.0 investments in addition to effect of a joining 124.6 associated company despite decrease in 115.2 116.0 gross trading profit due to leaving of 20.5 subsidiaries and
Slide 8: Machinery
Machinery Overview 【1-2Q】 Net income decreased primarily due to sluggish Gross trading profit Net income performance of automobile and construction machinery business in the U.S., impairment loss of a marketable security and provision for doubtful A/R in 100.5 22.6 21.1 Mongolia despite better perfo
Slide 9: Aerospace, Electronics & Multimedia
Aerospace, Electronics & Multimedia Overview 【1-2Q】 Net income decreased primarily due to Gross trading profit Net income sluggish IT-related business and the absence of gain on disposal of investments 144.0 and marketable securities. 150 139.0 14.6 133.5 15 【Full year】 11.2 Expecting decrease compa
Slide 10: Energy, Metals & Minerals
Energy, Metals & Minerals Overview （break out） 1-2Q Full year FY08 FY09 FY08 FY09 Metals, Mineral 55.9 105.8 Gross trading profit Net income resources & Coal 23.1 63.0 241.0 Energy 26.8 23.4 49.8 54.2 160.0 Reporting profits/losses from major group companies etc 150 200 1-2Q Full year FY08 FY09 FY08
Slide 11: Chemicals, Forest Products & General Merchandise
Chemicals, Forest Products & General Merchandise Overview Gross trading profit Net income （break out） 1-2Q Full year FY08 FY09 FY08 FY09 126.2 127.0 24.8 Forest Products & 122.6 2.8 5.9 8.3 11.0 22.0 General Merchandise 19.7 Chemicals 7.6 7.3 11.4 11.0 100 20 Reporting profits/losses from major grou
Slide 12: Food
Food Overview 【1-2Q】 Gross trading profit Net income Net income increased primarily due to expansion of food resources and food 344.0 distribution business. 324.7 22.0 300 【Full year】 264.6 20 18.1 18.7 Expecting increase of net income compared with the previous year due to better 200 performances o
Slide 13: Finance, Realty, Insurance & Logistics Services
Finance, Realty, Insurance & Logistics Services Overview （break out） 1-2Q Full year FY08 FY09 FY08 FY09 Gross trading profit Net income Realty (2.5) 2.8 (2.2) 5.0 Finance, Insurance 20 17.0 3.8 13.0 6.0 50.0 & logistics 14.5 50 11.0 （Orico’s temporary profit） 15.4 - 15.4 - 43.3 41.4 10 10.8 （Others）
Slide 14: Forecast for FY2009
1．Summary for the 1H of FY2009 ２．Segment Information (1H of FY2009) 3．Forecast for FY2009 (ending Mar 09) 4．Progress of Frontier+ 2008 5．Reference: Quarterly Information on Consolidated Operating Results © 13
Slide 15: Assumptions of FY2009
Assumptions of FY2009 FY2008 FY2009 1st half 2nd Half FY2009 (Reference) Sensitivities on Net Result Assumptions Result Forecast Forecast income against the 2nd half forecast (¥ 0.7) billion Currency exchange (¥/$) 116 100 105 95 100 （1 yen appreciation against USD） Interest (%) TIBOR(¥) 0.8% 0.9% 0
Slide 16: Frontier + 2008 Quantitative Plan and Forecast
Frontier + 2008 Quantitative Plan and Forecast Result of FY2008 and Plan / Forecast for FY2009 FY2008 FY2009 FY2009 (Ended March 31) （result） （plan） （forecast） Net income 218.6 240.0 240.0 Total assets 5,255.4 5,800.0 5,800.0 Net DER 1.7 times 1.6 times 1.6 times ROE 23.3% 22.2% 22.2% Frontier+ 2008
Slide 17: Net Income Forecast by Segments
Net Income Forecast by Segments 1st Half Original plan Full year FY2008 result for FY2009 forecast Difference Progress result Textile 13.2 22.0 26.0 4.0 51% 20.5 Machinery 3.7 23.0 11.0 (12.0) 34% 22.6 Aerospace, Electronics & Multimedia 1.9 17.0 10.0 (7.0) 19% 14.6 Energy, Metals & Minerals 86.4 12
Slide 18: Dividend Policy
Dividend Policy Basic dividend policy ITOCHU maintains and reinforces its competitive power as well as increases stockholders’ equity by retaining earnings to promote growth strategies. ITOCHU’s basic policy regarding dividend payments is a consistent and stable distribution of returns to the stockh
Slide 19: Progress of Frontier+ 2008
1．Summary for the 1H of FY2009 ２．Segment Information (1H of FY2009) 3．Forecast for FY2009 (ending Mar 09) 4．Progress of Frontier+ 2008 5．Reference: Quarterly Information on Consolidated Operating Results © 18
Slide 20: Frontier + 2008
FY2008 – FY2009 Mid-Term Management Plan Frontier + 2008 - Enhancing Corporate Value on the World Stage - Basic policies In addition to continuing efforts reflecting Frontier-2006 themes, we will be more aggressive. At the same time, we will strive to become a Global Enterprise that is highly attrac
Slide 21: Develop New Business Areas
Develop New Business Areas L-I-N-E-s - future earnings mainstays 9 Total investment of approximately ¥50 billion is planned in L-I-N-E-s during the period of Frontier+ 2008. Create new initiatives + Life & Health Care: Medical and health related businesses -Several investments in medical equipment s
Slide 22: Earnings from overseas businesses
Earnings from overseas businesses Increase earnings from overseas businesses* 9 Earnings from overseas businesses is expanding primarily due to Oceania’s profit expansion that is attributable to profit expansion of natural resources related business in Australia. 9 Earnings from overseas businesses
Slide 23: Investment Review
Investment Review Frontier + 2008 investment plan and result of FY2008 and 1H of FY2009 9 Frontier+ 2008 earmarks total investment of ¥500 billion (gross), ¥400 billion (net) over 2 years (FY2008 - FY2009). 9 In 1H of FY2009, total investment of approximately ¥140 billion (gross), ¥120 billion (net)
Slide 24: Reference: Quarterly Information
1．Summary for the 1H of FY2009 ２．Segment Information (1H of FY2009) 3．Forecast for FY2009 (ending Mar 09) 4．Progress of Frontier+ 2008 5．Reference: Quarterly Information on Consolidated Operating Results © 23
Slide 25: Summary of FY2009 2Q(1)
Summary of FY2009 2Q(1) 9 Net income for 2Q(for the 3months ended Jun 08) is ¥76.6 billion, a record high number as 2Q profit. 9 Significant increase in Energy, Metal & Multimedia and Finance, Realty, Insurance & Logistics Services compared with the same period of the previous year. Increase FY09 2Q
Slide 26: Summary of FY2009 2Q(2)
Summary of FY2009 2Q(2) 9 Significant increase in net income of ¥13.9 billion compared with last quarter (1Q for the 3months ended June 08) mainly due to significant price increase in natural resources and energy sector. 9 All business segment excluding Textile that had temporarily profit in 1Q incr
Slide 27: Quarter Information: Total
Quarter Information: Total 【vs. 08/2Q(3months) ： ¥255.7bn →¥294.3bn】 [Gross Trading Profit] An increase of ¥38.6billion primarily due to retrospective application of new prices for sale of 294.3 iron ore in addition to rise in prices of metal 300 255.7 248.2256.4 resources and energy despite decreas
Slide 28: Quarter Information: Textile
Quarter Information：Textile [Gross Trading Profit] 40 【vs. 08/2Q(3months) ： ¥30.0bn→¥25.1bn】 34.2 31.5 31.7 30.0 31.2 30 27.2 28.3 A decrease of ¥4.9billion primarily due to leaving 25.7 25.1 21.8 of subsidiaries resulted from assessment of and 20 withdrawal from inefficient business. 【vs. 09/1Q(3mo
Slide 29: Quarter Information: Machinery
Quarter Information：Machinery [Gross Trading Profit] 【vs. 08/2Q(3months) ： ¥28.6bn→¥24.8bn】 28.6 A decrease of ¥3.7billion primarily due to 30 25.7 25.2 24.8 22.8 23.9 sluggish performance of automobile and 21.1 21.7 22.0 20.6 construction machinery business in the U.S. 20 despite increase in ship t
Slide 30: Quarter Information: Aerospace, Electronics & Multimedia
Quarter Information：Aerospace, Electronics & Multimedia [Gross Trading Profit] 【vs. 08/2Q(3months) ： ¥34.5bn→¥32.8bn】 50 44.6 A decrease of ¥1.6billion primarily due to sluggish 40.9 40 33.7 34.5 IT-related business despite increase in domestic 31.5 30.9 32.8 27.4 28.9 28.2 mobile phones sales busin
Slide 31: Quarter Information: Energy, Metals & Minerals
Quarter Information：Energy, Metals & Minerals 【vs. 08/2Q(3months) ： ¥34.3bn→¥68.2bn】 [Gross Trading Profit] An increase of ¥33.9billion primarily due to retrospective application of new prices for sale 80 68.2 of iron ore in addition to rise in prices of metal resources and energy and expansion of s
Slide 32: Quarter Information: Chemicals, Forest Products & General Merchandise
Chemicals, Forest Products & Quarter Information： General Merchandise [Gross Trading Profit] 【vs. 08/2Q(3months) ： ¥32.0bn→¥35.2bn】 An increase of ¥3.2billion primarily due to 40 35.2 33.6 33.3 32.0 32.5 steadily high prices of chemicals and steady 29.1 30.2 29.7 29.7 30 28.5 performance in housing
Slide 33: Quarter Information: Food
Quarter Information：Food [Gross Trading Profit] 【vs. 08/2Q(3months) ： ¥85.4bn→¥89.2bn】 An increase of ¥3.9billion primarily due to 100 89.2 85.4 83.7 expansion of food resources and food 80.0 77.1 77.6 77.9 80.6 80 71.8 distribution business. 60 40 35.8 【vs. 09/1Q(3months) ： ¥80.6bn→¥89.2bn】 20 An i
Slide 34: Quarter Information: Finance, Realty, Insurance & Logistics Services
Finance, Realty, Insurance & Quarter Information： Logistics Services [Gross Trading Profit] 【vs. 08/2Q(3months) ： ¥4.4bn→¥9.9bn】 An increase of ¥5.4billion primarily due to the 20 absence of devaluation loss on long-term 15.1 development of real-estate business. 14.0 13.1 12.7 10.6 9.3 8.3 9.9 9.9 【
Slide 35: Forward-Looking Statements
Forward-Looking Statements: This material contains forward-looking statements regarding ITOCHU Corporation’s corporate plans, strategies, forecasts, and other statements that are not historical facts.They are based on current expectations, estimates, forecasts and projections about the industries in
Slide 36: SFP
SFP /TOCW