expansion on the move - mitsui · 2016-08-19 · expansion on the move healthcare mitsui is...
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Expansion on the move
Healthcare
Mitsui is expanding its health-
care businesses centered on
IHH, the largest private hospi-
tal group in Asia and Turkey,
which is expanding its busi-
ness in such ways as acquiring
a healthcare group in India.
Mitsui is developing medical
ancillary businesses by invest-
ing in MIMS Group, a drug
information company that
operates in 12 diff erent coun-
tries in Asia and Oceania (see
page 59), and also by agreeing
to invest in DaVita Care, a dialy-
sis clinics operator in Asia.
Feed additive
manufacturing
Novus is a major manufac-
turer of the feed additive
methionine (an essential
amino acid).
In order to respond to the
growing demand for food
around the world Mitsui plans
to expand the manufacturing
capacity for producing methi-
onine, whose market is
expected to continue to grow
at an annual rate of 5% over
the long term.
Total number disclosed
by IHH Healthcare Bhd.
Over 7,000 beds
in 2015
Close to
10,000 bedsin 2016
Production capacity
of methionine
320,000 tons
in 2015
440,000 tonsin 2020 (planned)
MITSUI & CO., LTD. ANNUAL REPORT 2016
IPP
Mitsuihasstakesinapower
generationbusinessthat
comprises70plantsin21
countriesaroundtheworld.
Byraisingprofitability
throughthecompletionof
projectsunderconstruction
andengaginginasset
replacement,Mitsuiisestab-
lishingasuperiorportfolio
diverseingeographicalloca-
tionandfuelmixinitsefforts
toachievesustainablegrowth
(seepage51).
Tank terminal
Inordertorespondtoincreas-
ingdemand,Mitsuiismoving
forwardwithconstructionto
expanditschemicaltankter-
minals,whichIntercontinental
TerminalsCompanyhasoper-
atedformanyyearsintheU.S.
portofHouston.Inaddition,
MitsuiisexpandingITCRubis,
locatedinEurope’smainport
ofAntwerp,Belgium(see
page64).
Bycapturingtherising
demandforbothchemical
andpetroleumproducts,
Mitsuiisaimingfortheexpan-
sionofastablebusinessthatis
lessaffectedbycommodity
marketconditions.
ITC/ITCRubis
totaltankcapacity
2.1millionm3
in2015
3.4 million m3
in2020(planned)
Equityshareofpower
generationcapacity
9.6GWin2015
11.1 GWin2016
MITSUI&CO.,LTD.ANNUALREPORT2016 01
Reinforcement on the move
LNG
Aspartofoureffortstocom-
prehensivelyreinforceourkey
strengthsinreserves,produc-
tionandcostcompetitive-
ness,wearestrengthening
ourdiverseLNGportfolioand
logisticalcapabilitiesona
globalscaleintheaimof
establishingourselvesasa
reliablesupplierofenergy
resourcestomeettheneeds
ofvariousconsumersaround
theworld.
Iron ore
Initsironorebusiness,Mitsui
hasbeenworkingwithits
partnersinAustraliaandBrazil
formanyyears.
Wecontinuetoexpand
productioncapacityandwork
toreinforceourcompetitive-
nessbasedonourcoreassets,
ineffortstocontributetoa
stablesupplyintheglobal
marketandtorespondtothe
globaldemandforironore,
whichisexpectedtoincrease
overthemediumtolong
term(seepage48).
MITSUI&CO.,LTD.ANNUALREPORT201602
Innovation on the move
Internet of Things
Mitsuihasnewlyinvestedin
OSIsoft,thegloballeaderin
IoTforindustrialcustomers.
OSIsofthasdevelopedthe
PISystem,whichisalready
usedby65%ofFortune500
companiesin125countries
aroundtheworld.TheMitsui
&Co.Groupwillleveragethe
PISystemtooptimizeitsbusi-
nessoperationsandestablish
newbusinessmodels(see
page61).
Fund for new pharmaceu-
tical development
Mitsuihasbeenexpandingthe
sizeofNovaQuest,aseriesof
privateequityfundsfocusedon
pharmaceuticaldevelopment,
bycollaboratingwithotherlarge
investors,includingQuintiles,a
majorproviderofoutsourced
pharmaceuticalservices.
Mitsuiwillengageinefforts
tofurthersupportNovaQuestto
providesolutionsinthedevel-
opmentofnewpharmaceutical
products,whichisexperiencing
rapidlyincreasingcosts.
High-speed
mobile data services
Mitsuihasinvestedin
Afrimax,ahigh-speedmobile
datacommunicationsopera-
torinSub-SaharanAfricathat
usesthefourth-generation
telecommunicationsstandard
Long-TermEvolution(LTE).
UsingtheVodafonebrand,
Afrimax’sbusinesspartner,
Mitsuiwillcontributeto
expandInternetusageinthe
region,wherethepenetration
ratecurrentlyremainsat
around7%.
Manufacturing carbon
fi ber light-weight tanks
Mitsuihasinvestedin
HexagonComposites,acom-
positetankmanufacturerthat
usescarbonfibertomanufac-
turepressuretanks.
Byexpandingthecompa-
ny’sbusinessintheglobal
market,Mitsuiwillhelp
reducegreenhousegasemis-
sionsinthetransportation
industrybypromotingtheuse
oflight-weightpartsand
materials(seepage55).
MITSUI&CO.,LTD.ANNUALREPORT2016 03
788.3
336.4
540.0
819.6
737.0
2015 2016 2017
(Forecast)
20142013
3,065
2,000
3,501
2,966
2015 2016 2017
(予想)
20142013
Financial
EBITDA* ¥billion (Yearsended/endingMarch31)
Profit(Loss)fortheYear
AttributabletoOwnersof
theParent ¥billion (Yearsended/endingMarch31)
NetCashProvidedbyOperatingActivities
NetCashUsedinInvestingActivities
FreeCashFlow ¥billion (YearsendedMarch31)
*EBITDA:Grossprofit+Selling,generalandadminis-
trativeexpenses+Dividendincome+Profit(loss)of
equitymethodinvestments+Depreciationand
amortizationmaynotmatchwiththetotalofitems
duetoroundingoff.
306.5
(83.4)
200.0
350.1
296.6
2015 2016 2017
(Forecast)
20142013
CoreOperatingCashFlow ¥billion (Yearsended/endingMarch31)
*CoreoperatingcashflowfortheyearendedMarch
31,2013isnotdisclosed.
471.7
360.0
661.6
608.9
2016 2017
(Forecast)
20152014
455.3
(754.5)
(299.2)
(210.6)
253.6
449.2
(659.8)
640.0
(386.4)
587.0
(408.1)
178.9
2013 2014 2015 2016
MITSUI & CO., LTD. ANNUAL REPORT 201604
Highlights (IFRS)
Profit(Loss)Attributableto
OwnersoftheParent
perShare ¥ (Yearsended/endingMarch31)
CashDividends ¥
DividendPayoutRatio % (Yearsended/endingMarch31)
TotalEquityAttributableto
OwnersoftheParent ¥trillion (AsofMarch31)
ROE % (Yearsended/endingMarch31)
7.7
5.8
9.79.4
2015 2016 2017
(Forecast)
20142013
NetInterest-bearingDebt ¥trillion
NetDER Times (AsofMarch31)
3.4
3.23.2
2.7
0.82
0.95
0.830.80
2015 201620142013
4.1
3.4
3.8
3.4
2015 201620142013
TotalAssets ¥trillion (AsofMarch31)
12.2
10.9
11.5
10.8
2015 201620142013
*Theconsolidateddividendpayoutratiofor2016
wasomittedduetoaloss.
171.0
(46.5)
111.6
192.2
162.5
2015 2016 2017
(Forecast)
20142013
64
37.4
64
50
44.8
59
30.7
43
26.5
2015 2016 2017
(Forecast)
20142013
MITSUI & CO., LTD. ANNUAL REPORT 2016 05
08 MessagefromtheCEO
14 ProgresstoDateoftheMedium-termManagementPlan
14 Medium-termManagementPlan—Challenge&Innovationfor2020
–DemonstratingMitsuiPremium–
15 MessagefromtheCFO
18 AchievementsinFiscalYearEndedMarch31,2016
inLinewiththeCurrentMedium-termManagementPlan
20 LifecycleManagementofInvestmentsandPracticing
DisciplinedPortfolioManagement
22 Mitsui’sValueCreation
22 Mitsui’sContinuingEvolutionbyMeetingtheChangingNeedsoftheTimes
24 Mitsui’sValueCreation
26 TheValueCreationProcess
32 StrategiesUnfoldingintheKeyStrategicDomains
34 GrowthofKeyStrategicDomainof“Mobility”
44 ReviewofOperations
44 ResultsbyOperatingSegment
46 Iron&SteelProductsSegment
48 Mineral&MetalResourcesSegment
50 Machinery&InfrastructureSegment
54 ChemicalsSegment
56 EnergySegment
58 LifestyleSegment
60 Innovation&CorporateDevelopmentSegment
63 AmericasSegment
64 EMEA(Europe,theMiddleEastandAfrica)Segment
65 AsiaPacificSegment
CONTENTS
MITSUI&CO.,LTD.ANNUALREPORT201606
66 CorporateGovernance
66 BoardofDirectorsandIndependentDirectors
68 Full-timeandIndependentAudit&SupervisoryBoardMembers
69 ManagingOfficers
70 SpecialDialogue:
InPursuitofCorporateGovernanceBefittingofMitsui
74 ConditionsofCorporateGovernance
82 InternalControls
85 OrganizationChart
86 MaterialityandOperations
86 TasksandAccomplishmentsbyEachKeyStrategicDomain
90 MajorInitiativestoMaterialIssues
92 10-YearFinancialData
94 CorporateInformation/InvestorInformation
ToOurStakeholders
Mitsuiupholdsthebasicideaofdevelopingandgrowingtogetherasamemberofsocietyand
creatingvalueforafuturewherepeople’saspirationscanbefulfilled.Thisideaactsasanindispensable
compassthatguidesusthroughsevereoperatingenvironments.Frombothfinancialandnon-financial
perspectives,thisintegratedreportintroducesandexplainsourresponsetotheissueswecurrently
face,theaccomplishmentswehavemadethroughourinitiativesthusfar,andthechallengeswewill
boldlytakeontowardsthefuture.Wehopethat,throughthisreport,ourstakeholderscangainabetter
senseofourunwaveringcommitmenttovaluecreation.
PleaserefertoourAnnualSecuritiesReportformoredetailedfinancialinformation,Sustainability
Report2016formoredetailedenvironmental,social,andgovernance(ESG)information,andother
Mitsuipublicationsforotherrelevantinformation.Allofthesedocumentscanbefoundonthe
Company’swebsite.
https://www.mitsui.com/jp/en/
GeneralManager,IRDivision
web
ACautionaryNoteonForward-LookingStatements
ThisAnnualReportcontainsstatements(includingfigures)regardingMitsui&Co.,Ltd.(“Mitsui,”“Mitsui&Co.,”“Company”)’scorporatestrategies,objectivesandviews
offuturedevelopmentsthatareforward-lookinginnatureandarenotsimplyreiterationsofhistoricalfacts.Thesestatementsarepresentedtoinformstakeholders
oftheviewsofMitsui’smanagementbutshouldnotbereliedonsolelyinmakinginvestmentandotherdecisions.Youshouldbeawarethatanumberofimportant
riskfactorscouldleadtooutcomesthatdiffermateriallyfromthosepresentedinsuchforward-lookingstatements.Theseinclude,butarenotlimitedto:(i)changes
ineconomicconditionsthatmayleadtounforeseendevelopmentsinmarketsforproductshandledbyMitsui,(ii)fluctuationsincurrencyexchangeratesthatmay
causeunexpecteddeteriorationinthevalueoftransactions,(iii)adversepoliticaldevelopmentsthatmaycreateunavoidabledelaysorpostponementoftransac-
tionsandprojects,(iv)changesinlaws,regulationsorpoliciesinanyofthecountrieswhereMitsuiconductsitsoperationsthatmayaffectMitsui’sabilitytofulfillits
commitments,and(v)significantchangesinthecompetitiveenvironment.Inthecourseofitsoperations,Mitsuiadoptsmeasurestocontroltheseandothertypes
ofrisks,butthisdoesnotconstituteaguaranteethatsuchmeasureswillbeeffective.
MITSUI & CO., LTD. ANNUAL REPORT 2016 07