Marubeni 201203 pres_en

Briefing on Financial Results for FY2012/3

May 10, 2012

Marubeni Corporation

0

Copyright 2012 Marubeni Corporation

Agenda

Ⅰ. FY2012/3 ResultsKey Factors of FY2012/3 ResultsBusiness Environment AnalysisEarnings Power and StructureBalance Sheets & Cash Flows

Ⅱ. Progress of SG‐12Progress of SG‐12 Key Measures

・・・ p2

・・・p16

1


Ⅰ. FY2012/3 Results

Business Environment Analysis

Earnings Power and Structure

Balance Sheets & Cash Flows

Key Factors of FY2012/3 Results

2


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 yenApprox. 660.0 billion yen of newinvestments have been approvedincluding above.

Financial Results of FY2012/3, the second year of SG‐12, are satisfactory..

Net income for FY2013/3 is estimated to grow to be 200.0 billion yen.


3







4



5

Source : IMF, World Economic Outlook, April 2012

≪World Output≫ ≪Crude Oil / Copper price≫

≪Exchange Rate≫ ≪Stock Prices≫

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

0

10

20

30

40

50

60

70

07/01 07/07 08/01 08/07 09/01 09/07 10/01 10/07 11/01 11/07 12/01

World exchange market capitalization [left axis]

Nikkei 225 [right axis]

(trillions of US dollars)

2012/4/27Nikkei 225 : 9,521 yen

(Yen)

5.4%

2.8%

-0.6%

5.3%

3.9% 3.5%4.1% 4.4%

2.8%

0.0%

-3.6%

3.2%

1.6% 1.4%2.0%

2.4%

8.7%

6.0%

2.8%

7.5% 6.2%5.7%

6.0% 6.2%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

2007 2008 2009 2010 2011 2012

proj.

2013

proj.

2014

proj.

World

Advanced Economies

Emerging and Developing Economies

60

70

80

90

100

110

120

130

07/01 07/07 08/01 08/07 09/01 09/07 10/01 10/07 11/01 11/07 12/01

Yen/$

(Yen)

2012/4/3079.82 yen

0

20

40

60

80

100

120

140

160

0

2,000

4,000

6,000

8,000

10,000

12,000

07/01 07/07 08/01 08/07 09/01 09/07 10/01 10/07 11/01 11/07 12/01

Copper (LME) [left axis]Crude Oil (WTI) [right axis]

(US$/ton) (US$/barrel)

2012/4/30copper : 8,530crude oil : 105







6


SG-12SG2009“G”PLAN

119.3

147.2

111.295.3

136.5

172.1

-50

0

50

100

150

200

FY2007/3 FY2008/3 FY2009/3 FY2010/3 FY2011/3 FY2012/3

(billions of yen)

Initial pros.(100.0)


Net Income


Initial pros.(80.0)


7


＋35.6 billion yen（＋26%）



Adjusted Operating Profit and Core Earnings(billions of yen)

Adjusted Operating Profit = Gross Trading Profit + SGA expenses (excluding restructuring costs in FY2007/3 .)Core Earnings = Adjusted Operating Profit + Interest expense-net＋Dividend income ＋Equity in earnings of affiliated companies

8

165.9

203.5

235.9

124.8

151.2 158.5

202.1

239.6 245.0

154.4

223.7

249.6

0

50

100

150

200

250

300

FY2007/3 FY2008/3 FY2009/3 FY2010/3 FY2011/3 FY2012/3

Adjusted Operating ProfitCore Earnings


Earnings Structure and Business Portfolio

9

Net incomeCore earningsFY20

11/3

FY20

12/3

Total Assets

【Category】①Resources： Energy, Metals & Mineral Resources *②Machinery： Transportation Machinery, Power Projects & Infrastructure, Plant& Industrial Machinery ③Materials： Forest Products, Chemicals④Consumer Products ： Food, Lifestyle, Finance, Logistics & IT Business, Real Estate Development *

*Iron and Steel Strategies and Coordination Business is continuously counted among Materials area though the business was Incorporated into Metals and Mineral Resources Segment in FY2011/3.*Real Estate Development Business is continuously counted among Consumer Products area though the business was Incorporated into Corporate & Eliminations, etc in FY2012/3.


Net Income by Operating Segment for FY2011/3 & FY2012/3

15.2

5.0 7.3 6.1

28.2

33.7

10.7

17.5

3.2 3.2

12.1

-2.9

14.0

6.12.0

7.5

40.9

49.3

14.3

21.4

6.1 5.3

16.1

-7.0-10

0

10

20

30

40

50

60(billions of yen)

10

Left :FY2011/3 Yearly actual

Right :FY2012/3 Yearly actual

Energy

Metals &

M

ineral R

esources

Plant & Industrial M

achinery

Pow

er Projects

& Infrastructure

Transportation M

achinery

Chem

icals

Forest Products

Food

Lifestyle

Real Estate

Developm

ent

Finance, Logistics &

IT B

usiness

Overseas

Corporate

Subsidiaries

Note ・・・ From FY2012/3, Real Estate Development is included in Corporate and Elimination.

Approx. JPY±0.6 billion /[USD100/MT]

(Reference) Major IndexesFY2011/3Actual①

FY2012/3Actual②

FY 2012/3 Sensitivity(to Net Income on yearly basis)

Approx. JPY ±1.1 billion/[JPY1/USD]

Approx. JPY±0.4 billion /[USD1/Barrel]95 +16

Variance（②－①）

Exchange Rate(JPY/USD) 87.8 79.8 -8.0

LME Copper(USD/MT) 7,539 8,811 +1,272

WTI Oil(USD/Barrel) 80







11


Equity and Net D/E Ratio


(times)

(billions of yen)

≪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 ）)

12


Cash Flows

13


March 2007 March 2008 March 2009 March 2010 March 2011 March 2012Equity ① 820.8 860.6 623.4 799.7 831.7 915.8Risk Assets ② 642.5 708.3 673.7 635.6 627.3 688.4Risk Buffer （①-②） 178.3 152.3 -50.3 164.1 204.4 227.4

820.8 860.6

623.4

799.7 831.7

915.8

642.5

708.3 673.7

635.6 627.3 688.4

178.3

152.3

-50.3

164.1

204.4 227.4

0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

-250.0

-200.0

-150.0

-100.0

-50.0

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

Equity and Risk Assets

SG-12SG2009“G”PLAN（billions of yen）（billions of yen）

14

Risk buffer(left axis)

Risk buffer(left axis)


SG-12SG2009“G”PLANSG-12SG2009“G”PLAN

4,873.35,207.2

4,707.3 4,586.6 4,679.1

5,129.9

2.52%

2.92%

2.24%2.05%

2.95%

3.51%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

0.0

1,000.0

2,000.0

3,000.0

4,000.0

5,000.0

6,000.0

FY2007/3 FY2008/3 FY2009/3 FY2010/3 FY2011/3 FY2012/3

Consolidated Total Asset

ROA

745.5 779.8

567.1

745.3 773.6

852.2

16.9%

19.3%

16.5%14.5%

18.0%

21.2%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

0.0

200.0

400.0

600.0

800.0

1,000.0

FY2007/3 FY2008/3 FY2009/3 FY2010/3 FY2011/3 FY2012/3

Shareholders' Equity ROE

＜ROE＞＜ROA＞

ROE and ROA

(billions of yen) (billions of yen)

15


Ⅱ. Progress of SG‐12

16


Progress of SG‐12

17


Priority Allocation of Management Resources

18


Major Projects Metals & Mineral Resources

Main activities in FY2012/3Acquisition of interests in the Roy Hill Iron Ore ProjectAntucoya Copper Project in Chile with Antofagasta plcAcquisition of Canadian coal companyAcquisition of Interests in Codrilla Deposit Acquisition of Additional Interest in Alouette Aluminum Smelter

19

Hancock Prospecting Pty Ltd and a Consortium comprising POSCO, Marubeni Corporation (“Marubeni”) and STX Corporation (“STX”) have entered into agreements for the Consortium to acquire a 30%(POSCO : 15%, Marubeni : 12.5%, STX : 2.5%) equity interest in Roy Hill Holdings, the holding company of the Roy Hill Iron Ore Project in Australia (“The Project”).※Total Contribution by the Consortium : AUD 3.5 billion

(Marubeni : AUD 1.5 billion, POSCO : AUD 1.7 billion, STX : AUD 0.3 billion)

The Project is developing its own fully-integrated iron ore mine, rail and port facility. The production and delivery capacity is expected to be 55 million tons per year, the largest capacity for a single iron ore mine in the Pilbara region of West Australia.

[Roy Hill Project]Production method ： open-pit miningMineral resources ： 2,323 million tons Production capacity ： 55 million tons/year Mining lifespan ： 2014 – 2041(28 years)Development cost ： approx. AUD 9.5 billion

＜Strengths of The Project ＞ A large amount of mineral resources High production ratio of lumps iron ore, the production of

which is expected to be rare in the future Rail and port facility owned by The Project No need for complicated ore dressing and low production

cost Close to Asia, the largest iron ore market

Acquisition of interests in the Roy Hill Iron Ore Project


Major Projects Metals & Mineral Resources

20

Marubeni has signed a Memorandum of Understanding with Antofagasta plc, one of the world’s leading copper producers, to become a 30% partner in the Antucoya copper mining project for a total cash consideration of US$350 million.

The total amount of copper ore reserves related to this project are estimated to exceed 640 million tons, and after the start of production in 2014, the project is expected to produce approx. 80 thousand tons of copper ingot annually over a period of approx. 20 years. Of this, Marubeni will be entitled to approx. 24 thousand tons per year of copper ingot ,which corresponds to Marubeni’s 30% interest in the project.

Through this investment, the total amount of copper ingot from Marubeni’s interests will increase from 125 thousand tons a year to 150 thousand tons a year, placing Marubeni as one of the top owners of copper assets among Japanese companies.

Marubeni has completed the acquisition of all of the issued and outstanding common shares of Grande Cache Coal Corporation, a Canadian metallurgical coal mining company, with Winsway Coking Coal Holdings (China) (“Winsway”). The interest is respectively to be held; 40%by Marubeni, 60% by Winsway

Under the current supply environment where supply sources of HCC are heavily concentrated in Australia, it is important from a point of diversification to secure an alternate source of supply of HCC from countries other than Australia to ensure stability of supply to Japanese end users.

【Grande Cache Coal Corporation】Location : Alberta, Canada

(millions of ton)

Beginning ofFY2009/3

AfterFY2014/3

Grande Cache - - 0.8 1.4

Lake Vermont - 2.7

Codrilla - 0.2

Others 2.9 4.8

Total 2.9 5.8 6.6 More than 9.0

1.3

-

4.4

Coal

Marubeni's Equity Coal*Capacity

FY2012/3

（Present）（Before acquisition

of Grande Cache）

(thousands of ton)

Beginning ofFY2009/3

FY2011/3 FY2012/3 FY2015/3

Los Pelambres Mine Owned since 1997 30 35 35 35

El Tesoro Mine Acquired in FY2009/3 30 30 30

Esperanza Mine Acquired in FY2009/3 60 60

Antucoya Mine Acquired in FY2012/3 24

30 65 125 150

※Los Pelambres Mine has expanded its capacity in 2010.

Marubeni's Equity Metal*Capacity

Copper

Total

Acquisition of Canadian coal companyAntucoya Copper Project in Chile with Antofagasta plc


Energy

Acquisition of Interests of LNG Project and Oil and Gas Fields in Papua New Guinea

Marubeni has acquired 21% shares of Merlin Petroleum Company (“Merlin”), more than 99% shares of which had been held by JX Nippon Oil & Gas Exploration Corporation (“JX”).

Merlin holds oil and gas interests in Papua New Guinea (“PNG”) including interests in the country's 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.

Long-term sales and purchase agreements for 6.6 million ton per annum of the LNG from the PNGLNG Project, scheduled to be on stream in 2014, have been executed with LNG buyers in Japan, China and Taiwan for 20 years.

Marubeni along with JX will promote business to extend opportunities in PNG and, at the same time, Marubeni and JX intend to cooperate to develop the energy resources in other regions as well.

Main activities in FY2012/3

Major Projects

Participation in the Niobrara Shale Oil Project

21

Marubeni has entered into an agreement with Hunt Oil Company, one of the world’s largest privately-owned independent oil and gas companies, to acquire a 35% working interest in the Eagle 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 Project, Marubeni’s total acreage for shale oil play is approx. 72 thousand net acres. (the largest acreage among Japanese firms)

We will continue to expand our business by acquiring quality shale oil and gas assets in the U.S. as well as other countries.

Participation in the Eagle Ford Shale Oil and Gas Project

Eagle Ford

Participation in the Eagle Ford Shale Oil and Gas Project

Acquisition of Interests of LNG Project and Oil and Gas Fields in Papua New Guinea


Power Projects

Marubeni to develop a power project in Oman

Marubeni agreed to develop and to acquire the Sur Independent Power Project in Oman with Chubu Electric Power Co.(“Chubu”), Qatar Electricity and Water Company Q.S.C (“QEWC”) and Multitech LLC(“Multitech”) .

＜Sur Independent Power Project＞・Location : Sur Industrial Estate (approx.150km south east from Muscat)・Power Generation Capacity : 2,000 MW・Shareholders : Marubeni 50%, Chubu 30%, QEWC 15%, Multitech 5%・Power Purchase Agreement : 15 year PPA with Oman Power and Water

Procurement Company SAOC・Schedule : Nov. 2011 Finance Close

Apr. 2013 Scheduled early power commencement dateApr. 2014 Scheduled commercial operation date (2,000MW)

Main activities in FY2012/3

Sur Power Project (Oman)Paiton 2 Coal‐Fired Power Project (Indonesia)Gunfleet Sands Offshore Wind Farm (UK)Offshore Wind Power Construction Firm (UK)

Major Projects

22

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.

This is the first case of a Japanese company making a large-scale investment in a wind farm project already in commercial operation.

Marubeni to Co‐Own Gunfleet Sands Offshore Wind Farm

Sur

SG-12Start

Present(Mar. 2012)

Marubeni's Net PowerGeneration Capacity

7,229MW 8,680MW

Continue to expand as aproirity business field

Marubeni's Net Power Generation Capacity


Transportation Machinery Business

Acquisition of the interest in 6 LNG VesselsMain activities in FY2012/3

Participation in Management of Westlake

Acquisition of the interest in 6 LNG Vessels

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 from A.P.Moller-Maersk A/S(“APMM”). Marubeni acquired a 48% equity position.

These 6 vessels were all built by Samsung Heavy Industries Co., Ltd. in 2008-2010. APMM previously owned 100% interest of 6 vessels(4 are under long-term charters and 2 are under short-term charters).

Marubeni will continue to seek opportunities to expand in this business as the company is confident in the increasing importance of LNG as energy and LNG vessels as a mode of transportation.

Decided to undertake 100% of the private placement of new shares issued by Westlake Services, LLC (“Westlake”) for US$250 million. Marubeni acquired a 20% equity position.

Westlake finances automobiles to consumer representatives in the U.S. It is the largest independent non-bank lender in the 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.

Major Projects

23


Grain Business

Acquisition of 100% Ownership of Grain Export Elevator in Brazil

Marubeni acquires the additional balance of the shares of Terlogs Terminal Maritimo Ltda.(“Terlogs”) which has been operated as a grain export elevator in Brazil. After this transaction, Marubeni’s ownership interest in Terlogs increases from 25.5% to 100%.

It is the first time in the grain history for Japanese firms to gain 100% ownership of a grain export elevator in Brazil.

After acquiring 100% ownerships of Terlogs, Marubeni will strengthen the grain supplying and procuring ability in Brazil by improving operation of the export elevator to be efficient and also by strengthening relationship with firms that have their own inland-procuring channels to develop together inland-procuring system.

Main activities in FY2012/3Investment in Chinese Feedstuff and Livestock BusinessAgreement with Sinograin Oil and LIUHE GroupAcquisition of 100% Ownership of Grain Export Elevator in Brazil

Major Projects

24

Agreement with Sinograin Oil and LIUHE Group

Investment in Chinese Feedstuff and Livestock Business

Concluded to invest in Qingdao Tianrun Food Co., Ltd.under LIUHE Group, which forms an integrated business of feedstuff , livestock breeding and processing for chicken products.

Agreed on strategic cooperation with Sinograin Oil (100% subsidiary of Sinograin) and LIUHE Group* to develop joint venture of feedstuff business. For this agreement, Marubeni took an intermediary role between Sinograin Oil and LIUHE Group.

Seeing the growing demand for feedstuff in China, the three companies aim to set up state-of-the-art feedstuff factories throughout China, expand market share and strengthen the foundation for feedstuff and livestock breeding integrated business.

0

5

10

15

20

25

FY07/3 FY08/3 FY09/3 FY10/3 FY11/3 FY12/3 FY13/3(Target)

off-shore tradeimport

(Million tons)

20 mil tons

22 mil tons

25 mil tons

* LIUHE Group and SICHUAN NEW HOPE AGRIBUSINESS CO. merged into NEW HOPE LIUHE CO.LTD in Sep. 2011.


Prospects for FY2013/3

25

FY2011/3 actual results FY2012/3 actual results Prospects for FY2013/3

Consolidated Net Income 136.5 billion yen 172.1 billion yen 200.0 billion yen

Net D/E Ratio 1.94 times 1.92 times Approx. 1.8 times

Risk Assets 627.3 billion yen(Equity：831.7 billion yen)

688.4 billion yen(Equity：915.8 billion yen)

Less than Equity

ROE 18.0% 21.2% Approx. 21%

Currency Exchange Rate

80 Yen/US$

US$ LIBOR

0.6％

Yen TIBOR

0.4％

LME Copper

US$8,500/t

Crude Oil (WTI)

US$95/bbl

Assumptions for FY2013/3

FY2013/3 Sensitivity to Net Income Prospect on yearly basis

Currency Exchange Rate

Approx. 1.3 billion yen（¥1/US$)

LME Copper

Approx. 0.6 billion yen（US$100/t)

Crude Oil & Gas (oil equivalent)

Approx. 0.3 billion yen

(US$1/bbl）

[Jan.‐Dec.] [Jan.‐Dec.]


Net Income and Resource Ratio

26

41%46%

38%

FY2011/3 actual FY2012/3 actual FY2013/3 prospect

Resources Non‐resources Resource ratio

136.5 billion yen

the highest income record (second highest : 147.2 billion yen for FY2008/3)

• 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.

172.1 billion yen

200.0 billion yen


Prospects of Net Income by Operating Segment for FY2013/3

27

14.0

6.12.0

7.5

40.9

49.3

14.3

21.4

6.1 5.3

16.1

-7.0

22.5

7.5 4.0

9.5

37.0

52.5

15.5

22.5

10.0

6.5

17.0

3.5

-10

0

10

20

30

40

50

60(billions of yen)

Left :FY2012/3 Yearly actual

Right :FY2013/3 Yearly Prospect (as of May 7, 2012)

Energy

Metals &

M

ineral R

esources

Plant & Industrial M

achinery

Pow

er Projects

& Infrastructure

Transportation M

achinery

Chem

icals

Forest Products

Food

Lifestyle

Real Estate

Developm

ent

Finance, Logistics &

IT B

usiness

Overseas

Corporate

Subsidiaries

Note ・・・ From FY2012/3, Real Estate Development is included in Corporate and Elimination.

FY 2013/3 Sensitivity(to Net Income on yearly basis)

Approx. JPY ±1.3 billion/[JPY1/USD]

Approx. JPY±0.3 billion /[USD1/Barrel]

Approx. JPY±0.6 billion /[USD100/MT]

(Reference) Major IndexesFY2012/3Actual①

FY2013/3Assumption②

Variance（②－①）

Exchange Rate(JPY/USD) 79.8 80.0 +0.2

WTI Oil(USD/Barrel) 95 95 -0

LME Copper(USD/MT) 8,811 8,500 -311

DISCLAIMER REGARDING FORWARD-LOOKING STATEMENTSTHIS DOCUMENT CONTAINS FORWARD-LOOKING STATEMENTS ABOUT THE PERFORMANCE OF MARUBENI AND ITS GROUP COMPANIES, BASED ON MANAGEMENT'SASSUMPTIONS 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.