Briefing on Financial Results for FY2012/3 May 10, 2012 Marubeni Corporation 0
Agenda Ⅰ. FY2012/3 Results ・・・ p2 Key Factors of FY2012/3 Results Business Environment Analysis Earnings Power and Structure Balance Sheets & Cash Flows Ⅱ. Progress of SG‐12 ・・・p16 Progress of SG‐12 Key MeasuresCopyright 2012 Marubeni Corporation 1
Ⅰ. FY2012/3 Results Key Factors of FY2012/3 Results Business Environment Analysis Earnings Power and Structure Balance Sheets & Cash FlowsCopyright 2012 Marubeni Corporation 2
Key Factors of FY2012/3 Results Financial Results of FY2012/3, the second year of SG‐12, are satisfactory. .① Consolidated net income : 172.1 billion yen (+35.6 billion yen or +26%, year‐on‐year) ➔ reached a new record high (Second highest is 147.2 billion yen for FY2008/3)② Net D/E ratio : 1.92 times (down by 0.02 points from FY2011/3 year end) Equity : 915.8 billion yen (+84.0 billion yen from FY2011/3 year end) Net interest‐bearing debt : 1,755.7 billion yen (+140.1 billion yen from FY2011/3 year end)③ Actual new investment and loans for FY2012/3 ： 260.0 billion yen Approx. 660.0 billion yen of new investments have been approved including above. Net income for FY2013/3 is estimated to grow to be 200.0 billion yen. Copyright 2012 Marubeni Corporation 3
Ⅰ. FY2012/3 Results Key Factors of FY2012/3 Results Business Environment Analysis Earnings Power and Structure Balance Sheets & Cash FlowsCopyright 2012 Marubeni Corporation 4
Earnings Structure and Business Portfolio FY2012/3 FY2011/3 Core earnings Net income Total Assets 【Category】 *Iron and Steel Strategies and Coordination Business is continuously counted among Materials area ①Resources： Energy, Metals & Mineral Resources * ②Machinery： Transportation Machinery, Power Projects & Infrastructure, Plant& Industrial Machinery though the business was Incorporated into Metals and Mineral Resources Segment in FY2011/3. ③Materials： Forest Products, Chemicals *Real Estate Development Business is continuously counted among Consumer Products area though the ④Consumer Products ： Food, Lifestyle, Finance, Logistics & IT Business, Real Estate Development * business was Incorporated into Corporate & Eliminations, etc in FY2012/3.Copyright 2012 Marubeni Corporation 9
Net Income by Operating Segment for FY2011/3 & FY2012/3(billions of yen) 60 (Reference) Major Indexes Left :FY2011/3 Yearly actual FY2011/3 FY2012/3 Variance FY 2012/3 Sensitivity Actual① Actual② （②－①） (to Net Income on yearly basis) Right :FY2012/3 Yearly actual 49.3 Exchange Rate 87.8 79.8 -8.0 Approx. JPY ±1.1 billion 50 (JPY/USD) /[JPY1/USD] WTI Oil Approx. JPY±0.4 billion (USD/Barrel) 80 95 +16 /[USD1/Barrel] 40.9 LME Copper Approx. JPY±0.6 billion 40 (USD/MT) 7,539 8,811 +1,272 /[USD100/MT] 33.7 30 28.2 21.4 20 17.5 15.2 16.1 14.0 14.3 10.7 12.1 10 7.3 7.5 5.0 6.1 6.1 6.1 5.3 3.2 3.2 2.0 0 -2.9 -10 -7.0 Food Lifestyle Forest Products Chemicals Energy Resources Mineral Metals & Machinery Transportation & Infrastructure Power Projects Machinery Industrial Plant & Business Logistics & IT Finance, Subsidiaries Corporate Overseas Development Real Estate Note ・・・ From FY2012/3, Real Estate Development is included in Corporate and Elimination.Copyright 2012 Marubeni Corporation 10
Ⅰ. FY2012/3 Results Key Factors of FY2012/3 Results Business Environment Analysis Earnings Power and Structure Balance Sheets & Cash FlowsCopyright 2012 Marubeni Corporation 11
Equity and Net D/E Ratio(billions of yen) (times) ≪Reasons for changes in Equity≫ (March-2011 / March-2012 comparison) ①Changes in Retained earnings ⇒＋143.5 billion yen (Net income +172.1 billion yen Dividends payable -28.7 billion yen） ②Changes in Currency translation adjustments ⇒ - 34.6 billion yen （USD/JPY ：¥81⇒¥78 （End Dec. 2010 ⇒End Dec. 2011 ）) ③Changes in unrealized losses on derivatives ⇒ - 25.1 billion yen （USD 20yr SWAP rate ：4.06%⇒2.52% （End Dec. 2010 ⇒End Dec. 2011 ）) “G”PLAN SG2009 SG-12 Copyright 2012 Marubeni Corporation 12
Ⅱ. Progress of SG‐12Copyright 2012 Marubeni Corporation 16
Progress of SG‐12Copyright 2012 Marubeni Corporation 17
Priority Allocation of Management ResourcesCopyright 2012 Marubeni Corporation 18
Major Projects Metals & Mineral Resources Main activities in FY2012/3 Acquisition of interests in the Roy Hill Iron Ore Project Antucoya Copper Project in Chile with Antofagasta plc Acquisition of Canadian coal company Acquisition of Interests in Codrilla Deposit Acquisition of Additional Interest in Alouette Aluminum Smelter ＜Strengths of The Project ＞ Acquisition of interests in the Roy Hill Iron Ore Project A large amount of mineral resources High production ratio of lumps iron ore, the production of Hancock Prospecting Pty Ltd and a Consortium comprising POSCO, which is expected to be rare in the future Marubeni Corporation (“Marubeni”) and STX Corporation (“STX”) Rail and port facility owned by The Project have entered into agreements for the Consortium to acquire a 30% No need for complicated ore dressing and low production (POSCO : 15%, Marubeni : 12.5%, STX : 2.5%) equity interest in cost Roy Hill Holdings, the holding company of the Roy Hill Iron Ore Project in Australia (“The Project”). Close to Asia, the largest iron ore market ※Total Contribution by the Consortium : AUD 3.5 billion [Roy Hill Project] (Marubeni : AUD 1.5 billion, POSCO : AUD 1.7 billion, STX : AUD 0.3 billion) Production method ： open-pit mining Mineral resources ： 2,323 million tons The Project is developing its own fully-integrated iron ore mine, rail and port facility. The production and delivery capacity is expected to Production capacity ： 55 million tons/year be 55 million tons per year, the largest capacity for a single iron ore Mining lifespan ： 2014 – 2041(28 years) mine in the Pilbara region of West Australia. Development cost ： approx. AUD 9.5 billion Copyright 2012 Marubeni Corporation 19
Major Projects Metals & Mineral Resources Antucoya Copper Project in Chile with Acquisition of Canadian coal company Antofagasta plc Marubeni has signed a Memorandum of Understanding with Marubeni has completed the acquisition of all of the issued Antofagasta plc, one of the world’s leading copper producers, and outstanding common shares of Grande Cache Coal to become a 30% partner in the Antucoya copper mining Corporation, a Canadian metallurgical coal mining project for a total cash consideration of US$350 million. company, with Winsway Coking Coal Holdings (China) The total amount of copper ore reserves related to this project (“Winsway”). The interest is respectively to be held; 40% are estimated to exceed 640 million tons, and after the start of by Marubeni, 60% by Winsway production in 2014, the project is expected to produce approx. Under the current supply environment where supply 80 thousand tons of copper ingot annually over a period of sources of HCC are heavily concentrated in Australia, it is approx. 20 years. Of this, Marubeni will be entitled to approx. important from a point of diversification to secure an 24 thousand tons per year of copper ingot ,which alternate source of supply of HCC from countries other corresponds to Marubeni’s 30% interest in the project. than Australia to ensure stability of supply to Japanese Through this investment, the total amount of copper ingot from end users. Marubeni’s interests will increase from 125 thousand tons a year to 150 thousand tons a year, placing Marubeni as one of 【Grande Cache Coal Corporation】 the top owners of copper assets among Japanese companies. Location : Alberta, Canada (thousands of ton) (millions of ton) Marubenis Equity Metal Marubenis Equity Coal *Capacity *Capacity Copper Coal FY2012/3 Beginning of Beginning of After FY2011/3 FY2012/3 FY2015/3 FY2009/3 FY2009/3 （Before acquisition （Present） FY2014/3 of Grande Cache） Los Pelambres Mine Owned since 1997 30 35 35 35 Grande Cache - - 0.8 1.4 El Tesoro Mine Acquired in FY2009/3 30 30 30 Lake Vermont - 1.3 2.7 Esperanza Mine Acquired in FY2009/3 60 60 Codrilla - - 0.2 Others 2.9 4.4 4.8 Antucoya Mine Acquired in FY2012/3 24 Total 2.9 5.8 6.6 More than 9.0 Total 30 65 125 150 ※Los Pelambres Mine has expanded its capacity in 2010. Copyright 2012 Marubeni Corporation 20
Major Projects Energy Acquisition of Interests of LNG Project and Oil and Gas Main activities in FY2012/3 Fields in Papua New Guinea Participation in the Niobrara Shale Oil Project Marubeni has acquired 21% shares of Merlin Petroleum Participation in the Eagle Ford Shale Oil and Company (“Merlin”), more than 99% shares of which had been Gas Project held by JX Nippon Oil & Gas Exploration Corporation (“JX”). Acquisition of Interests of LNG Project and Oil and Gas Fields in Papua New Guinea Merlin holds oil and gas interests in Papua New Guinea (“PNG”) including interests in the countrys first LNG project (“PNGLNG Project”) utilizing the gas to be produced from the fields in which Merlin participates and other oil and gas fields in PNG. Participation in the Eagle Ford Shale Oil and Gas Project Long-term sales and purchase agreements for 6.6 million ton Marubeni has entered into an agreement with Hunt Oil Company, per annum of the LNG from the PNGLNG Project, scheduled one of the world’s largest privately-owned independent oil and to be on stream in 2014, have been executed with LNG gas companies, to acquire a 35% working interest in the Eagle buyers in Japan, China and Taiwan for 20 years. Ford shale oil and gas play covering approx. 52 thousand net acres of oil and gas leases located in Texas. As the result of this Marubeni along with JX will promote business to extend Project, Marubeni’s total acreage for shale oil play is approx. 72 opportunities in PNG and, at the same time, Marubeni and JX thousand net acres. (the largest acreage among Japanese firms) intend to cooperate to develop the energy resources in other regions as well. We will continue to expand our business by acquiring quality shale oil and gas assets in the U.S. as well as other countries. Eagle Ford Copyright 2012 Marubeni Corporation 21
Major Projects Power Projects Main activities in FY2012/3 Marubeni to develop a power project in Oman Sur Power Project (Oman) Paiton 2 Coal‐Fired Power Project (Indonesia) Marubeni agreed to develop and to acquire the Sur Gunfleet Sands Offshore Wind Farm (UK) Independent Power Project in Oman with Chubu Electric Offshore Wind Power Construction Firm (UK) Power Co.(“Chubu”), Qatar Electricity and Water Company Q.S.C (“QEWC”) and Multitech LLC(“Multitech”) . ＜Sur Independent Power Project＞ Marubenis Net Power Generation Capacity SG-12 Present ・Location : Sur Industrial Estate (approx.150km south east from Muscat) Start (Mar. 2012) ・Power Generation Capacity : 2,000 MW Continue to expand as a Marubenis Net Power proirity business field ・Shareholders : Marubeni 50%, Chubu 30%, QEWC 15%, Multitech 5% 7,229MW 8,680MW Generation Capacity ・Power Purchase Agreement : 15 year PPA with Oman Power and Water Procurement Company SAOC Marubeni to Co‐Own Gunfleet Sands Offshore Wind ・Schedule : Nov. 2011 Finance Close Apr. 2013 Scheduled early power commencement date Farm Apr. 2014 Scheduled commercial operation date (2,000MW) Marubeni Corporation has entered into an agreement with DONG Energy in which Marubeni acquires a 49.9% stake in DONG Energy’s 172MW Gunfleet Sands offshore wind farm for Approx. GBP 200 million. The wind farm went into production in the spring of 2010. Sur This is the first case of a Japanese company making a large- scale investment in a wind farm project already in commercial operation.Copyright 2012 Marubeni Corporation 22
Major Projects Transportation Machinery Business Acquisition of the interest in 6 LNG Vessels Main activities in FY2012/3 Participation in Management of Westlake Marubeni jointly with Teekay LNG Partners L.P. has completed the acquisition of the ownership interest of 6 LNG vessels Acquisition of the interest in 6 LNG Vessels from A.P.Moller-Maersk A/S(“APMM”). Marubeni acquired a 48% equity position. These 6 vessels were all built by Samsung Heavy Industries Participation in Management of Westlake Co., Ltd. in 2008-2010. APMM previously owned 100% interest of 6 vessels(4 are under long-term charters and 2 are Decided to undertake 100% of the private placement of new under short-term charters). shares issued by Westlake Services, LLC (“Westlake”) for US$250 million. Marubeni acquired a 20% equity position. Marubeni will continue to seek opportunities to expand in this business as the company is confident in the increasing Westlake finances automobiles to consumer representatives importance of LNG as energy and LNG vessels as a mode of in the U.S. It is the largest independent non-bank lender in the transportation. automotive retail finance business in the U.S. With this investment, Marubeni will become a long-term partner to support and accelerate Westlake’s growth and profits.Copyright 2012 Marubeni Corporation 23
Major Projects Grain Business Main activities in FY2012/3 Acquisition of 100% Ownership of Grain Export Elevator Investment in Chinese Feedstuff and Livestock in Brazil Business Marubeni acquires the additional balance of the shares of Agreement with Sinograin Oil and LIUHE Group Terlogs Terminal Maritimo Ltda.(“Terlogs”) which has been Acquisition of 100% Ownership of Grain Export Elevator operated as a grain export elevator in Brazil. After this in Brazil transaction, Marubeni’s ownership interest in Terlogs increases from 25.5% to 100%. Investment in Chinese Feedstuff and Livestock Business It is the first time in the grain history for Japanese firms to gain 100% ownership of a grain export elevator in Brazil. Concluded to invest in Qingdao Tianrun Food Co., Ltd. under LIUHE Group, which forms an integrated business of After acquiring 100% ownerships of Terlogs, Marubeni will feedstuff , livestock breeding and processing for chicken strengthen the grain supplying and procuring ability in Brazil products. by improving operation of the export elevator to be efficient and also by strengthening relationship with firms that haveAgreement with Sinograin Oil and LIUHE Group their own inland-procuring channels to develop together inland-procuring system. Agreed on strategic cooperation with Sinograin Oil (100% subsidiary of Sinograin) and LIUHE Group* to develop joint 25 mil tons venture of feedstuff business. For this agreement, Marubeni took (Million tons) 22 mil tons an intermediary role between Sinograin Oil and LIUHE Group. 25 20 mil tons Seeing the growing demand for feedstuff in China, the three 20 off-shore trade companies aim to set up state-of-the-art feedstuff factories 15 import throughout China, expand market share and strengthen the 10 foundation for feedstuff and livestock breeding integrated business. 5 * LIUHE Group and SICHUAN NEW HOPE AGRIBUSINESS CO. merged 0 FY07/3 FY08/3 FY09/3 FY10/3 FY11/3 FY12/3 FY13/3 into NEW HOPE LIUHE CO.LTD in Sep. 2011. (Target)Copyright 2012 Marubeni Corporation 24
Prospects for FY2013/3 FY2011/3 actual results FY2012/3 actual results Prospects for FY2013/3 Consolidated Net 136.5 billion yen 172.1 billion yen 200.0 billion yen Income Net D/E Ratio 1.94 times 1.92 times Approx. 1.8 times Risk Assets 627.3 billion yen 688.4 billion yen Less than Equity (Equity：831.7 billion yen) (Equity：915.8 billion yen) ROE 18.0% 21.2% Approx. 21% Assumptions for FY2013/3 Currency US$ LIBOR Yen TIBOR LME Copper Crude Oil (WTI) Exchange Rate 80 Yen/US$ 0.6％ 0.4％ US$8,500/t US$95/bbl [Jan.‐Dec.] [Jan.‐Dec.] FY2013/3 Sensitivity to Net Income Prospect on yearly basis Currency Exchange Rate LME Copper Crude Oil & Gas (oil equivalent) Approx. 1.3 billion yen Approx. 0.6 billion yen Approx. 0.3 billion yen （¥1/US$) （US$100/t) (US$1/bbl）Copyright 2012 Marubeni Corporation 25
Net Income and Resource Ratio • Net income for FY2012/3 reached a new record high. Net income for FY2013/3 is estimated to grow to be 200.0 billion yen. • Marubeni will continue profit growth maintaining a good balance of resources and non‐resources. the highest income record (second highest : 147.2 billion yen for FY2008/3) 200.0 billion yen 172.1 billion yen 136.5 billion yen 46% 41% 38% FY2011/3 actual FY2012/3 actual FY2013/3 prospect Resources Non‐resources Resource ratioCopyright 2012 Marubeni Corporation 26
Prospects of Net Income by Operating Segment for FY2013/3(billions of yen) 60 (Reference) Major Indexes FY2012/3 FY2013/3 Variance FY 2013/3 Sensitivity Left :FY2012/3 Yearly actual 52.5 Actual ① Assumption② (to Net Income on yearly basis) （②－①） Right :FY2013/3 Yearly Prospect (as of May 7, 2012) 49.3 Exchange Rate Approx. JPY ±1.3 billion (JPY/USD) 79.8 80.0 +0.2 /[JPY1/USD] 50 WTI Oil Approx. JPY±0.3 billion (USD/Barrel) 95 95 -0 /[USD1/Barrel] 40.9 LME Copper Approx. JPY±0.6 billion 8,811 8,500 -311 40 37.0 (USD/MT) /[USD100/MT] 30 22.5 21.4 22.5 17.0 20 16.1 14.0 14.3 15.5 9.5 10.0 10 7.5 7.5 6.1 6.1 5.3 6.5 4.0 3.5 2.0 0 -10 -7.0 Food Lifestyle Forest Products Chemicals Energy Resources Mineral Metals & Machinery Transportation & Infrastructure Power Projects Machinery Industrial Plant & Business Logistics & IT Finance, Subsidiaries Corporate Overseas Development Real Estate Note ・・・ From FY2012/3, Real Estate Development is included in Corporate and Elimination.Copyright 2012 Marubeni Corporation 27
DISCLAIMER REGARDING FORWARD-LOOKING STATEMENTSTHIS DOCUMENT CONTAINS FORWARD-LOOKING STATEMENTS ABOUT THE PERFORMANCE OF MARUBENI AND ITS GROUP COMPANIES, BASED ON MANAGEMENTSASSUMPTIONS IN LIGHT OF CURRENT INFORMATION. THE FOLLOWING FACTORS MAY THEREFORE INFLUENCE ACTUAL RESULTS.THESE FACTORS INCLUDE CONSUMER TRENDS IN JAPAN AND IN MAJOR GLOBAL MARKETS, PRIVATE CAPITAL EXPENDITURES, CURRENCY FLUCTUATIONS,NOTABLY AGAINST THE U.S. DOLLAR, MATERIALS PRICES, AND POLITICAL TURMOIL IN CERTAIN COUNTRIES AND REGIONS.
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