MARUBENI CORPORATION 2024.03
Consolidated Financial Results
FYE 3/2024
May 2, 2024 TSE Code: 8002
Disclaimer Regarding Forward Looking Statements and Original Language
This material contains forward-looking statements about the future performance, events or management plans of Marubeni Corporation and its Group companies (the Company) based on the available information, certain assumptions and expectations at the point of disclosure, of which many are beyond the Company's control. These are subject to a number of risks, uncertainties and factors, including, but not limited to, economic and financial conditions, factors that may affect the level of demand and financial performance of the major industries and customers we serve, interest rates and currency fluctuations, availability and cost of funding, fluctuations in commodity and materials prices, political turmoil in certain countries and regions, litigation claims, changes in laws, regulations and tax rules, and other factors. Actual results, performances and achievements may differ materially from those described explicitly or implicitly in the relevant forward-looking statements. The Company has no responsibility for any possible damages arising from the use of information on this material, nor does the Company have any obligation to update these statements, information, future events or otherwise.
This material is an English language translation of the materials originally written in Japanese. In case of discrepancies, the Japanese version is authoritative and universally valid.
Briefing on Consolidated Financial Results for FYE 3/2024 (held on May 8, 2024)
(CEO)
I am Masumi Kakinoki, CEO of Marubeni Corporation. Thank you for taking the time today.
Now, I will explain our consolidated results for the fiscal year ended March 31, 2024, followed by the full-year forecasts for the fiscal year ending March 31, 2025 first. CFO Takayuki Furuya will then explain the results by segment. After that, I will take over for the following part to discuss our capital allocation, and the progress and profit growth image in GC2024 Mid-Term Management Strategy.
I would like to begin with the consolidated results for the fiscal year ended March 31, 2024. Please refer to the presentation material titled "Consolidated Financial Results FYE 3/2024," on page 1.
01 Key Factors of FYE 3/2024
- Net profit was ¥471.4bn (-¥71.6bnYOY) surpassing the full-year forecast of ¥450.0bn (announced on Feb-2-2024)
- Adjusted net profit was ¥467.0bn (-¥59.0bnYOY) exceeding the range of ¥400.0 to ¥450.0bn of underlying adjusted net profit
Breakdown of adjusted net profit:
• | Non-resources | ¥307.0bn (-¥14.0bn YOY): Increased in Power, Food I, etc., decreased in Food II, Chemicals, etc. |
• | Resources | ¥152.0bn (-¥47.0bn YOY): Decreased in the coking coal business and others, due to lower commodity |
prices |
Non-resources generated around ¥300.0bn in adjusted net profit for the third consecutive year
- Core operating cash flow was +¥548.0bn (-¥36.2bnYOY) remaining at a high level
- Annual dividend per share is planned to be increased to ¥85.0 (an increase by +¥2.0 from ¥83.0, the previous forecast announced on Feb-2-2024)
（billion yen) | FYE 3/2023 | FYE 3/2024 | Change |
Net profit | 543.0 | 471.4 | -71.6(-13%) |
Adjusted net profit | 526.0 | 467.0 | -59.0(-11%) |
Core operating cash flow | +584.2 | +548.0 | -36.2(-6%) |
Free cash flow after shareholder distributions | +572.8 | +24.9 | -547.9(-96%) |
（excluding changes in working capital and others） | |||
ROE | 22.4% | 15.2% | -7.2 points |
Net DE ratio | 0.52 times | 0.55 times | +0.03 points |
Dividend per share (annual) | 78.0 yen | 85.0 yen | +7.0 yen |
interim(paid) 41.5 yen, | |||
year-end(plan) 43.5 yen |
* Adjusted net profit: net profit excluding one-time items, shown in an approximate figure. For one-time items, please refer to P3 of "IR Supplementary Information"
* Core operating cash flow: operating cash flow excluding net increase/decrease in working capital and others
- "Equity attributable to owners of the parent" is described as "shareholders' equity" in this material
1
Profit attributable to owners of the parent for the period (also referred to as net profit) amounted to 471.4 billion yen, marking the second highest record. It was a 71.6 billion yen decrease from the previous fiscal year, but exceeded the full-year forecast of 450.0 billion yen announced at the Q3 result announcement in February.
Adjusted net profit, excluding one-time items from net profit, was 467.0 billion yen, a decrease of 59.0 billion yen from the previous fiscal year. The breakdown of adjusted net profit is 307.0 billion yen for non-resource businesses and 152.0 billion yen for resource businesses.
Non-resources generated around 300.0 billion yen in adjusted net profit for the third consecutive year, which we believe is evidence of a steadily strengthening earnings base.
Break-down by segment will be discussed later.
Core operating cash flow decreased by 36.2 billion yen year on year to positive 548.0 billion yen, in response to the lower adjusted net profit, but it remained at a high level. Free cash flow after shareholder distributions excluding changes in working capital and others was positive 24.9 billion yen.
As for the balance sheet, shareholders' equity as of March 31, 2024, was approx. 3.5 trillion yen, with an increase of approx. 580.0 billion yen from the previous fiscal year- end. Net DE ratio stood at 0.55 times, stayed at the same level as the previous fiscal year-end.
02 Full-year Forecast for FYE 3/2025
- Net profit: ¥480.0bn (+¥8.6bn YOY) anticipating profit increase
- Adjusted net profit: ¥460.0bn (-¥7.0bn YOY)
- Adjusted net profit for non-resources: ¥321.0bn (+¥14.0bn YOY) aiming to achieve a steady profit growth
- Net profit forecast includes around -¥20.0bn of cushion to prepare for a contingency
- Core operating cash flow: +¥570.0bn (+¥22.0bn YOY) anticipating higher cash generation capacity
- Annual dividend: ¥90.0 per share (forecast), a +¥5.0 YOY increase, based on the progress in strengthening of earnings base
- Share buybacks up to ¥50.0bn using free cash have been resolved (estimated total payout ratio: 42%)
（billion yen) | FYE 3/2024 |
Net profit | 471.4 |
Adjusted net profit | 467.0 |
Core operating cash flow | +548.0 |
Free cash flow after shareholder distributions | +24.9 |
（excluding changes in working capital and others） | |
ROE | 15.2% |
Net DE ratio | 0.55 times |
Dividend per share (annual) | 85.0 yen (plan) |
FYE 3/2025 Forecast | Change |
+570.0 | +22.0 (+4%) |
-140.0 | -164.9 |
around 15% | |
ー | |
around 0.6～0.7 times | |
ー | |
90.0 yen (forecast) | +5.0 yen |
2
Now let me move on to the full-year forecasts for the fiscal year ending March 31, 2025. Please turn to page 2.
The full-year forecasts for the fiscal year ending March 31, 2025, is 480.0 billion yen for net profit, and 460.0 billion yen for adjusted net profit. We expect adjusted net profit to stay at the same level as the year before, including decreases of a 21.0 billion yen in Power due to the normalization in the business environment and a 5.0 billion yen in resources due to lower commodity prices and others, that will be mostly offset by the stable profit growth in other non- resource businesses.
Adjusted net profit for non-resources is forecasted to be 321.0 billion yen, the same level as that for the fiscal year ended March 31, 2023 when marked the historical high. In the fiscal year ending March 31, 2025, we are aiming to renew the record.
In addition to the adjusted net profit, as we expect a 20.0 billion yen of one-time gain, the forecast for net profit is 480.0 billion yen.
The forecast for the one-time items includes an approx. 20.0 billion yen of cushion to prepare for a contingency, considering the uncertain global economy and business environment.
The forecast for core operating cash flow is positive 570.0 billion yen. Net DE ratio at the end of March 2025 is forecasted to be around 0.6 to 0.7 times.
Now, shareholder returns policy.
The annual dividend per share for the fiscal year ended March 31, 2024 is planned to be 85 yen, a two-yen increase from the previous forecast of 83 yen at the Q3 announcement in February, as we see a steady progress in the enhancement of earnings base.
The annual dividend per share forecast for the fiscal year ending March 31, 2025 is 90 yen, with a five-yen increase from 85 yen in the previous year, based on the outlook for the solid progress in strengthening of earnings base as we anticipate 14.0 billion yen of profit increase in non- resources.
Additionally, we have resolved to conduct up to 50.0 billion yen of share buybacks.
That concludes the overview of the results for the fiscal year ended March 31, 2024 and the full- year forecast for the fiscal year ending March 31, 2025.
Next, our CFO Takayuki Furuya will present the results by segment.
03 Net Profit and Adjusted Net Profit
Net Profit
（billion yen)
500
400
300
200
100
0
Non-resources Resources Consolidated total
223.3 | 424.3 | 543.0 | 471.4 | 480.0 |
197.5 | 190.8 | 162.9 | 189.0 | |
64.1 | 226.9 | 344.3 | 288.5 | 325.0 |
156.5 | ||||
FYE 3/2021 | FYE 3/2022 | FYE 3/2023 | FYE 3/2024 | FYE 3/2025 Forecast |
（announced on May-2-2024) |
Adjusted Net Profit | Non-resources Resources | Consolidated total | ||
（billion yen) | 467.0 | 460.0 | ||
243.0 | 489.0 | 526.0 |
500 | ||||
400 | 197.0 | 199.0 | 152.0 | 147.0 |
300 | ||||
200 | 66.0 | 321.0 | 307.0 | 321.0 |
100 | 296.0 | |||
178.0 | ||||
0 |
FYE 3/2021 | FYE 3/2022 | FYE 3/2023 | FYE 3/2024 | FYE 3/2025 Forecast |
（announced on May-2-2024)
* Resources: | Total of "Energy" and "Metals & Mineral Resources" excluding "Steel Products Dept." | * "Other" | ||||||
Other: | Total of "Next Generation Business Development", "Next Generation Corporate | |||||||
(billion y en) | FYE 3/2025 Forec as t | |||||||
Development" and "Other" | FYE 3/2021 | FYE 3/2022 | FYE 3/2023 | FYE 3/2024 | announced on May-2-2024 | |||
Non-resources: | Other than the above | Net profit | 2.7 | -0.0 | 7.9 | 20.0 | -34.0 | |
Adjusted net profit | -1.0 | -4.0 | 6.0 | 8.0 | -8.0 |
3
04 Adjusted Net Profit Forecast for FYE 3/2025 changes from FYE 3/2024
- Adjusted net profit forecast for FYE 3/2025 is ¥460.0bn (-¥7.0bn YOY), staying at the same level as FYE 3/2024
- Breakdown of the -¥7.0bn changes: non-resources +¥14.0bn, resources -¥5.0bn, others -¥16.0bn (deterioration in interest expense-net, etc.)
- The forecast of ¥321.0bn in adjusted net profit for non-resources is on the same level as the record high in the FYE 3/2023. Aim to renew the record
Adjusted Net Profit | Non-resources Resources | |
Consolidated total | ||
（billion yen) | ||
467.0
152.0
307.0
-5.0
+14.0
( - ) Coking coal business, Roy Hill iron ore project (lower market prices, etc.)
( + ) Copper mine business in Chile (higher copper price, additional interests acquired in Los Pelambres mine, etc.)
( + ) Organic growths in Agri Business, Construction, Industrial Machinery & Mobility, etc.
Improvement in profitability in Chemicals, Forest Products, etc. and others
( - ) Lower margin due mainly to changes in business environment
- IPP in Singapore
- SmartestEnergy
- Marubeni-ItochuSteel Inc.
460.0
147.0
321.0
FYE 3/2024
（full-year average USD/JPY: ¥144.62）
FYE 3/2025 Forecast
（full-year average USD/JPY: ¥140.00）
4
05 Profit by Segment FYE 3/2023 vs FYE 3/2024
Net Profit | FYE 3/2023 | FYE 3/2024 | |||||||||||||||||||||||||||||||||||||||||||||||
（billion yen) | 199.4 | ||||||||||||||||||||||||||||||||||||||||||||||||
2060 | 163.5 | ||||||||||||||||||||||||||||||||||||||||||||||||
76.9 | 47.3 | 43.7 43.9 | |||||||||||||||||||||||||||||||||||||||||||||||
40 | 42.7 41.5 | 38.7 39.2 40.0 | |||||||||||||||||||||||||||||||||||||||||||||||
28.2 26.4 | 27.1 | ||||||||||||||||||||||||||||||||||||||||||||||||
30 | |||||||||||||||||||||||||||||||||||||||||||||||||
17.0 | 18.0 | 23.8 | |||||||||||||||||||||||||||||||||||||||||||||||
20 | 14.3 | 16.9 | |||||||||||||||||||||||||||||||||||||||||||||||
9.9 | |||||||||||||||||||||||||||||||||||||||||||||||||
10 | 6.8 | 9.5 | 7.8 | 11.6 | 7.0 | 8.8 | |||||||||||||||||||||||||||||||||||||||||||
0.3 | |||||||||||||||||||||||||||||||||||||||||||||||||
0 | |||||||||||||||||||||||||||||||||||||||||||||||||
-14.2 | -5.1 | -2.0 | -3.1 | ||||||||||||||||||||||||||||||||||||||||||||||
-10 | -9.4 | ||||||||||||||||||||||||||||||||||||||||||||||||
（ | Adjusted Net Profit | 201.0 | FYE 3/2023 | FYE 3/2024 | |||||||||||||||||||||||||||||||||||||||||||||
billion yen) | 155.0 | ||||||||||||||||||||||||||||||||||||||||||||||||
200 | |||||||||||||||||||||||||||||||||||||||||||||||||
60 | 54.0 | 60.0 | |||||||||||||||||||||||||||||||||||||||||||||||
46.0 | |||||||||||||||||||||||||||||||||||||||||||||||||
40 | 39.0 37.0 | 36.0 | 40.0 39.0 | ||||||||||||||||||||||||||||||||||||||||||||||
30 | 25.0 | 31.0 30.0 | 27.0 | ||||||||||||||||||||||||||||||||||||||||||||||
20 | 17.0 | 19.0 | 23.0 | ||||||||||||||||||||||||||||||||||||||||||||||
14.0 | 8.0 | ||||||||||||||||||||||||||||||||||||||||||||||||
10 | 9.0 | 10.0 | 10.08.0 | 12.0 | 5.0 5.0 | 9.0 | 9.0 | ||||||||||||||||||||||||||||||||||||||||||
-1.0-2.0 | |||||||||||||||||||||||||||||||||||||||||||||||||
0 | |||||||||||||||||||||||||||||||||||||||||||||||||
-2.0 | -3.0 | ||||||||||||||||||||||||||||||||||||||||||||||||
-10 | |||||||||||||||||||||||||||||||||||||||||||||||||
IT | Agri | Forest | Metals & | Aerospace | Finance, | Construction, | Next | Next | |||||||||||||||||||||||||||||||||||||||||
Infras tructure | Leasing & | Industrial | Generation | Generation | |||||||||||||||||||||||||||||||||||||||||||||
Lifestyle | Food I | Food II | Chemicals | Mineral Energy Power | |||||||||||||||||||||||||||||||||||||||||||||
Solutions | Business | Products | Project | & Ship | Real Estate | Machinery & | Business | Corporate | |||||||||||||||||||||||||||||||||||||||||
Resources | Business | Mobility | Development Development | ||||||||||||||||||||||||||||||||||||||||||||||
Consumer Products | Materials | Energy & Infrastructure Solution | Transportation & Industrial | CDIO | |||||||||||||||||||||||||||||||||||||||||||||
Machinery, Financial Business | |||||||||||||||||||||||||||||||||||||||||||||||||
- Based on the FYE 3/2024 segments. Operating segment information for FYE 3/2023 has been reclassified due to organizational changes. Please refer to P2 of "IR Supplementary Information" for the details
5
(CFO)
I am Takayuki Furuya, CFO. I will now present our business results by segment for the fiscal year ended March 31, 2024. Please turn to page 5. I will explain the results based on the graph of adjusted net profit in the lower half of the page.
First, resource segments, that you can find near the center of the graph.
In Metals & Mineral Resources, adjusted net profit decreased by 46.0 billion yen year on year to 155.0 billion yen, due to profit decrease at the Australian coking coal business reflecting the lower commodity prices, and others.
In Energy, profit decreased by 10.0 billion yen year on year to 36.0 billion yen, because of the declined profit in oil and gas E&P due to lower market prices and others.
Next, non-resource segments.
In Power, profit increased by 6.0 billion yen year on year to 60.0 billion yen mainly due to higher profits in overseas IPP businesses, strong performance in SmartestEnergy in the U.K., and others.
In Food I, profit increased by 5.0 billion yen to 17.0 billion yen due to the strong performances in overseas manufacturing and sales business of instant coffee and others.
In Construction, Industrial Machinery & Mobility, profit increased by 4.0 billion yen to
27.0 billion yen due to a favorable condition notably in the construction machinery business and others.
Meanwhile, in Chemicals, profit decreased by 6.0 billion yen year on year to 8.0 billion yen, due to lower profits in petrochemicals and inorganic chemicals trading.
In Food II, profit decreased by 6.0 billion yen to 19.0 billion yen due to lower profits in the beef processing and sales business in the U.S. and others.
06 Profit Forecast for FYE 3/2025 by Segment | Changes from FYE 3/2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Profit | FYE 3/2024 Actual | FYE 3/2025 Forecast | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
（billion yen) | 163.5 | 149.0 | ※1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
160 | 53.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
75.0 | 47.3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
44.0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
40 | 41.5 | 39.2 | 43.0 | 43.9 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
26.4 27.0 | 27.1 | 32.0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
30 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
17.0 17.0 18.0 | 22.0 | 16.9 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
20 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
9.9 | 11.0 | 9.0 | 7.8 | 8.0 | 13.0 | 11.0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10 | 7.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
0 | 0.3 | 1.0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
-10 | -3.1 | - | 3.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
-14.2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
（ | Adjusted Net Profit | FYE 3/2024 Actual | FYE 3/2025 Forecast | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
billion yen) | 155.0 | 149.0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
160 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
60.0 | 48.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
43.0 | 39.0 | 39.0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
40 | 37.0 | 36.0 33.0 | 30.0 32.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
32.0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
30 | 27.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
17.0 17.019.0 | 22.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
20 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10 | 10.0 | 11.0 5.0 | 10.0 8.0 | 8.0 | 8.0 | 13.0 | 9.0 11.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
-2.0 | 0.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
-10 | -3.0 | - | 3.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Metals & | Finance, | Construction, | Next | Next | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Forest | IT | Agri | Aerospace | Leasing & | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lif esty le | Food I | Food II | Chemicals Mineral | Energy | Power | Infras truc ture | Industrial | Generation | Generation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Products | Solutions | Business | Project | & Ship | Rel Estate | Machinery & | Business | Corporate | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Resources | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business | Mobility | Development | Development | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consumer Products | Food & Agri | Materials | Energy & Inf rastructure Solution | Transportation & Industrial | CDIO | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Machinery , Financial Business | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
* Based on the FYE 3/2025 segments. Operating segment information for FYE 3/2024 has been reclassified due to organizational changes. Please refer to P2 of "IR Supplementary Information" for the details
※1 Including the gains that are to be realized on the foreign currency translation adjustments due to the deconsolidation of the investment management company related to the LNG business. (approx. ¥40.0bn, expected in H2 FYE 3/2025)
6
Next, please refer to page 6, which shows the forecasts announced on the 2nd of May, for the fiscal year ending March 31, 2025. I will explain the forecasts based again on the graph at the bottom of the page, with focus on segments where the changes from the previous year's results are bigger.
First, resource segments, that again you can find near the center of the graph.
As we factor in declines in commodity prices, we expect profit in Metals & Mineral Resources to decrease by 6.0 billion yen to 149.0 billion yen, and profit in Energy to decrease by 3.0 billion yen to 33.0 billion yen.
Next, non-resource segments.
In Finance, Leasing & Real Estate Business, we expect profit to increase by 9.0 billion yen year on year to 48.0 billion yen reflecting the recovery in the profit we take in from Aircastle on the consolidated basis, and other effects expected from growth investments, etc.
In Agri Business, we expect profit to increase by 6.0 billion yen to 43.0 billion yen, due to profit increases in Helena and MacroSource in the U.S., and others.
In Construction, Industrial Machinery & Mobility, we expect profit to increase by 5.0 billion yen to 32.0 billion yen, assuming an increase in profit of the mobility-related business and others. In Chemicals which experienced a market stagnation in China and in Forest Products where the forestry and pulp production business in Indonesia underperformed in the previous year, we expect profit to increase by 5.0 billion yen respectively, because of the recoveries.
In Power, we expect profit to decrease by 21.0 billion yen to 39.0 billion yen, reflecting the normalization in the business environments in overseas IPPs, and wholesale and retail of electricity.
That's all from me.
07 Cash Flow Generation/Shareholders' Equity/Net Interest-Bearing Debt
Core Operating Cash Flow
（billion yen） | 584.2 | 570.0 | ||
600 | 570.5 | 548.0 | ||
369.6
400
200
0
FYE 3/2021 | FYE 3/2022 | FYE 3/2023 | FYE 3/2024 | FYE 3/2025 Forecast |
（announced on May-2-2024)
Shareholders' Equity, Net Interest-Bearing Debt and Net DE Ratio
(billion yen) | Shareholders' equity | 3,459.7*2 | ||||
around 3,300.0 | ||||||
Net interest-bearing debt | ||||||
Net DE ratio *1 | ||||||
2,877.7 | ||||||
3,000 | ||||||
2,242.2 | *2 | around 2,200.0 | 1.5 | |||
1,902.4 | ||||||
2,000 | 1,814.8 1,687.9 | 1,860.0 | ||||
1,483.1 | ||||||
0.83 times | ||||||
around 0.6〜0.7 times | ||||||
1,000 | 0.52 times | 0.55 times | ||||
0.93 times | ||||||
0 | Mar-31-2021 | Mar-31-2022 | Mar-31-2023 | Mar-31-2024 | Mar-31-2025 Forecast | 0.4 |
（announced on May-2-2024) |
*1 For FYE 3/2023 and beyond, the denominator to calculate net DE ratio has been changed from "total equity" to "shareholders' equity." Net DE ratio for previous fiscal years have been re-presented accordingly
*2 Optional repayment of ¥150.0bn of the perpetual subordinated loan was completed on Aug-16-2023. (Shareholders' equity decreased and net interest-bearing debt increased respectively, by the same amount)
7
08 Capital Allocation FYE 3/2024 Actual / FYE 3/2025 Forecast
- In FYE 3/2025, we will continue to focus on growth investments for profit growth and enhancing shareholder returns, while emphasizing financial and investment discipline
-
Allocation plan for free cash, the surplus from accumulated management resources (Mar-31-2025 forecast: approx. ¥580.0bn)
① ¥90.0bn: growth investments for profit growth (new investments, CAPEX and others)
②¥50.0bn: shareholder returns through share buybacks
The remaining of approx. ¥440.0bn will be internally reserved. Allocation for growth investments and shareholder returns will be discussed based on the situations of balance sheets and cash flows
Capital Allocation*1
(billion yen)
FYE 3/2024 Actual
Term-end free cash: approx. ¥580.0bn
Divestments 107.2 | Shareholder | |
distributions | ||
162.7 | ||
Core operating CF | New investments, | |
548.0 | ||
CAPEX and others | ||
458.1 | ||
Cash In-flow | Cash Out-flow |
FYE 3/2025 Forecast
(before free cash allocation)
Divestments 70.0 | Shareholder | |
distributions | ||
150.0 | ||
Core operating CF | New investments, | |
570.0 | ||
CAPEX and others | ||
490.0 | ||
Cash In-flow | Cash Out-flow |
Term-end free cash forecast
before allocation: approx. ¥580.0bn
Additional allocation
¥50.0bn:
Shareholder returns
through share buybacks
¥90.0bn:
Growth investments
Term-end free cash forecast
after allocation:
approx. ¥440.0bn (internal reserves)
*1 Excluding changes in working capital and others. Figures for shareholder distributions are aggregated in the fiscal year to which the profit i.e. the source of funds is attributed, and are different from cash flow
Share buybacks of ¥50.0bn decided this time is attributed to FYE 3/2025 as it will be funded by free cash
8
(CEO)
Next, I will explain about capital allocation and shareholder returns. Please turn to page 8.
We have decided on how to utilize the free cash, which represents the additional capacity of our management resources accumulated during the GC2024 period. The free cash at the end of the fiscal year ended March 31, 2024 amounted to approx. 580.0 billion yen, and we anticipate it will remain at the same level for the end of the fiscal year ending March 31, 2025.
Out of this amount, we have decided to allocate an additional 90.0 billion yen for new investments in the fiscal year ending March 31, 2025. We are at a stage to implement strategies for further growth, and we believe that allocating management resources to growth investments when there are good investment opportunities will lead to maximization of corporate value. Therefore, considering our current rich investment pipeline, we judged it appropriate to allocate a certain amount to growth investments.
Furthermore, we have decided to allocate 50.0 billion yen for shareholder returns and conduct share buybacks. Our basic policy is to deliver shareholder returns with a total payout ratio of 30- 35% of the profits for each period. However, this time, as a return from free cash which is accumulated management resources, we will conduct it outside the guideline of the total payout ratio. As a result, the total payout ratio for the fiscal year ending March 31, 2025 is estimated to be 42%.
As a result, a total of 140.0 billion yen of free cash will be used this time, and the expected remaining free cash at the end of the fiscal year ending March 31, 2025 will be 440.0 billion yen. As for the remaining amount, we will consider allocating it to growth investments and shareholder returns while aiming for further profit growth, taking into account the balance sheet and cash flow situation.
09 New Investments and Divestments Main Items for FYE 3/2024 | （after free cash allocation) | ||||||||||||
*1 | FYE 3/2025 | ||||||||||||
(billion yen) | FYE 3/2024 | Horizon 1 | Horizon 2 | Horizon 3 | FYE 3/2024 Main items | Forecast | |||||||
（announced on | |||||||||||||
May-2-2024) | |||||||||||||
New Investments | - 458.1 | - 154.4 | - 207.2 | - 96.4 | - 580.0 | ||||||||
+ CAPEX and others *2 | |||||||||||||
Horizon 2 | |||||||||||||
・TOB of ARTERIA Networks approx.-¥16.0bn *3 | |||||||||||||
・Aircraft surplus parts distributor (DASI, USA) | |||||||||||||
・Production outsourcing and marketing of non-ferrous metal products | |||||||||||||
(Pan Pacific Copper, Japan) | |||||||||||||
Distribution | ・Automotive aftermarket business (MAIHOIII related, USA) | ||||||||||||
- 192.5 | - 98.3 | - 94.2 | ・Agri-inputs related business (Helena related, USA) | ||||||||||
Business | ・Agri-inputs related business (Adubos Real related, Brazil) | ||||||||||||
New | Horizon 3 | ||||||||||||
- 290.0 | ・Manufacturing and sales of spices and seasonings (Euroma, Netherland) | - 400.0 | |||||||||||
Invest- | ・Manufacturer and supplier of food ingredients and packaged food products | ||||||||||||
ments | (AIG, Vietnam) | ||||||||||||
・Healthcare turnkey solutions provider (Lunatus, UAE) | |||||||||||||
・Manufacturer of medical consumables (One-ject, Indonesia) | |||||||||||||
Finance Business | - 30.1 | - 27.8 | - 2.3 | ・Aircraft leasing business (Aircastle, USA) | |||||||||
Stable Earnings- | - 33.5 | - 33.5 | - | ・Power generation business (renewable energy, etc.) | |||||||||
Type Business | ・Overseas water/wastewater services and IWP projects | ||||||||||||
Natural Resource | - 33.9 | - 33.9 | - | ・Acquisition of additional interest in Los Pelambres Copper Mine in Chile | |||||||||
Investments | |||||||||||||
excluding | |||||||||||||
CAPEX Natural Resource | - 168.1 | - 154.4 | - 154.4 | ・Agri-inputs related business (Helena, USA) *4 | - 180.0 | ||||||||
and | Investments | ||||||||||||
others | Natural Resource | - 13.7 | - 0.0 | - 13.6 | |||||||||
Investments | |||||||||||||
Divestments | +107.2 | +70.0 | |||||||||||
Total
- 350.9 | - 510.0 |
*1 Horizon 1: improvement of existing businesses, Horizon 2: pursuit of strategies in existing business domains, Horizon 3: new business models and growth domains currently not yet focused on
*2 CAPEX and others: additional capital expenditure and others in order to maintain and improve values of existing investments and loans
*3 TOB of ARTERIA Networks: presented as a part of new investment on this material for explanatory convenience. It is actually an additional investment in a consolidated subsidiary, and the amount of cash outflow is included in the financing activities on the consolidated statement of cash flows. Net cash used in the investing activities on the consolidated statement of cash flows is -¥334.4bn for FYE 3/2024, the total of new investments is -¥273.5bn for FYE 3/2024. The figures on the above table do not match either of those.
*4 Including approximately -¥9.0bn of short-term agriculture loan which Helena (USA) provided to customers
9
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
Marubeni Corporation published this content on 08 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 May 2024 14:08:00 UTC.
