Investors Meeting for Food Company December 20, 2016 General - PowerPoint PPT Presentation

Investors Meeting for Food Company December 20, 2016

General Overview of Food Company  Organization  Management Policy  Business Portfolio  Financial Highlights Introduction of each Division 2

General Overview of Food Company 3

Executive Vice President Provisions Div. Planning & Administration Dept. Grain, Feed & Oilseeds Dept. ： corn, wheat, barley, oilseeds etc. Food Safety & Compliance Management Office Oil, Fats & Grain Products Dept. ： rice, starch, fats etc. IT Solution Sect. Food Company Sugar, Confectionary Materials, ： sugar, coffee, confectionary, coffee, Coffee & Dairy Products Dept. dairy President Fresh Food Div. CFO ： Marine products Marine Products Dept. Business Accounting & Control Sect. Meat Products Dept. ： Meat products Risk Management Sect. Agri Products Dept. ： Fresh Fruit, Vegetables, Juice etc. Affiliate Administration Sect. Food Products Marketing & Distribution Div. Food Monitor & Review Sect. Food Products Marketing ： retail, wholesale products, snacks, & Distribution Dept. pet food Food Products Marketing ： imported branded products, & Development Dept. food development, food service, FamilyMart related products Total Assets ： 1.7 Trillion Yen (September 30, 2016) No. of Employees ： 535 （ As of 1 st of April,2016 ） 4

Policy ： Structuring a Strong and Tight Value Chain Strategy ： “ BOTTOM UP ” ＆ “ PORTFOLIO ” ～ From Downstream(Retail) to Upstream(Raw Material)! From Domestic to Overseas! ～ ～ Diversify RISK & Maximize RETURN ！～ Domestic Retail → Wholesale → Product & Raw Material Strength Strengthen Procurement of Raw Material Overseas RISK High Risk Middle Risk Low Risk Low Return High Return Middle Return RETURN 5

Subsidiaries Associated Raw Materials/ Companies Production Wholesale Retail Joint Ventures materials PROVENCE HUILES Oilseeds (vegetable oils) (vegetable oils) Building a Worldwide QTI (High-value-added America Value Chain UNEX GUATEMALA grain/ingredients （ Coffee beans ） Europe for animal feed) From Retail EGT (Wheat 、 corn 、 to Raw Material HyLife (Pork) soybeans, DDGS) CGB (Corn, soy beans, wheat, milo) ANEKA COFFEE FamilyMart ANEKA TUNA Dole ・ China BIX ・ Taiwan Longrong Asia ・ Thailand Burra Foods (Milk powder) Longda ・ Vietnam Zhongxin Foodstuff, etc. ・ Indonesia Calbee-Wings CP ・ Malaysia Food Strategic business alliance & MEGMILK capital participation partner SNOW BRAND ITOCHU Feed Mills NIPPON ACCESS ITOCHU FamilyMart UNY Sugar ITOCHU Food Sales Japan Holdings and Marketing FUJI OIL ITOCHU- Prima Meat SHOKUHIN Packers 6

(Unit) Basic profit: billion yen, Total assets :10 billion yen 180 4.0% 3.5% 160 3.3% 3.2% 3.1% 140 2.9% 3.0% 2.6% 2.6% 120 2.3% 100 2.0% 1.9% 2.0% 1.8% 177.2 176.1 172.3 80 157.5 137.0 129.8 60 120.9 53.9 54.1 50.8 113.1 107.1 106.5 105.4 44.9 44.1 1.0% 36.0 40 30.0 25.0 20.0 19.0 18.0 20 0 0.0% FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 Plan Total assets Basic profit ROA(right axis) 7

（ Unit : billion yen ） 5yrs total FY2017 FY2013 FY2014 FY2015 FY2016 (right axis) Plan 120 300 263.2 80 200 54.1 53.9 50.8 44.1 44.9 40 100 66.3 60.1 49.1 46.5 41.2 0 0 (23.0) (40) (100) (44.1) (49.1) (50.1) (80) (200) Familymart Familymart additional additional acquisition acquisition (23.3) (22.4) (109.0) (275.3) (120) (300) Acquisition of Dole (134.1) Core operating cash flows Net investment cash flows Basic profit 8

In FY2016, Retail Market has grown +4% compared with FY2007. CVS sector has led the market with +43% growth. Trend of the categories of retail market from FY2007 to 2016 Retail Market （ Trillion yen ） each categories （ Trillion yen) 140.0 15 135.0 10 130.0 5 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 Retail Market CVS Department store Supermarket 9

FY2013 - 2017 FY2013 - 2017 5 Year range 5 Year average Market Overall Average ROA Volatility ROA Return Middle Risk Domestic Retail 2.5 - 4.1% Middle 3.2% Middle Middle Return Low Risk Domestic Wholesale 2.1 - 2.5% Low 2.3% Low Low Return Domestic Low Risk 3.9 - 4.6% Low 4.0% High Manufacturer High Return Overseas High Risk 1.9 - 4.2% High 2.7% Middle Raw Material Middle Return 10

（ Unit : billion yen ） ROA ROA FY2014 Composition by sectors FY2015 Composition by sectors 10.0% 10.0% 50% 24.1 50% 26.0 728.4 755.0 720.1 582.2 5.5% 14.6 4.8% 5.0% 4.5% 4.4% 5.0% 4.1% 13.3 25% 25% 3.6% 7.5 7.1 2.0% 6.0 6.2 1.8% 139.7 167.6 124.6 129.5 0% 0.0% 0% 0.0% Overseas Domestic Domestic Domestic Overseas Domestic Domestic Domestic Raw Material Manufacturer Wholesale Retail Raw Material Manufacturer Wholesale Retail Basic profit 47% 12% 29% 12% Basic profit 48% 13% 25% 14% Total assets 37% 8% 46% 9% Total assets 41% 7% 43% 9% ROA 4.1% 4.8% 2.0% 4.4% ROA 3.6% 5.5% 1.8% 4.5% ROA ROA FY2016 Composition by sectors FY2017 Plan Composition by sectors 10.0% 10.0% 50% 50% 799.2 798.2 23.8 6.0% 14.5 15.0 547.8 567.7 4.8% 14.7 5.0% 5.0% 4.2% 25% 25% 3.5% 7.9 3.1% 7.5 8.8 2.6% 6.8 1.9% 1.8% 244.4 254.0 131.7 141.1 0% 0.0% 0% 0.0% Overseas Domestic Domestic Domestic Overseas Domestic Domestic Domestic Raw Material Manufacturer Wholesale Retail Raw Material Manufacturer Wholesale Retail Basic profit Basic profit 32% 18% 33% 17% 44% 13% 27% 16% Total assets 32% 8% 46% 14% Total assets 32% 8% 45% 14% ROA 2.6% 6.0% 1.9% 3.1% ROA 4.2% 4.8% 1.8% 3.5% 11

Introduction of each Division 12

Business ： Retail & Wholesale business focusing on CVS and Supermarket. Import and Distribution of Final Product. Agent Business of Manufacturer, Retail Support, Food Product Business Area  Development, Import and Distribution of Brand Products Major Group FamilyMart UNY Holdings Co., Ltd., NIPPON ACCESS,  Companies ITOCHU-SHOKUHIN etc. Top class distribution network amongst Wholesale & Retail sector Strength Number one in store numbers within Top 3 metro areas  (Tokyo, Osaka, Nagoya) 1. Swiftly create and solidify synergy from merger of UNY&FamilyMart. Future measures 2. Expand revenue and efficiency from wholesalers of group companies.  3. Strengthen the value adding function (business marketing related) 13

Business ： Production, Manufacturing and Distribution of Marine, Meat and Agri-products. Business Area Fresh Foods （ Marine, Meat, Agri-products ）  Major Group  Dole, Prima Meat Packers, HyLife, Aneka Tuna etc. Companies Holding a worldwide value chain of fresh foods (Production, Strength Manufacturing and Distribution)  Top class share amongst each fields. “Becoming a Worldwide Leading Fresh Foods Integrator” 1. Expand the business of Dole (fresh business and packaged foods Future measures  business ) 2. Consider new investment with the same scale as Dole. 14

Business ： Handle grain and other raw materials to provide stable supply to Japan and the Asian Market. Feedstuff, Coffee Beans, Dairy Products, Premium Oil, Sesame, Business Area  Starch etc. (Overseas) CGB, EGT , P .H. Major Group  (Domestic) FUJI OIL, ITOCHU Food Sales and Marketing, ITOCHU Sugar, Companies ITOCHU Feed Mills Export business of U.S Grain. Strength Global supply chain of sesame, oil, coffee and Strong Domestic  Distribution network. 1. Structure Portfolio to reduce volatility. Consider investment to soft commodity sector. Future measures  2. Strengthen U.S. Grain business. 3. Strengthen Domestic Sales and Relationship with CP 15

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 which ITOCHU Corporation operates. As the expectations, estimates, forecasts and projections are subject to a number of risks, uncertainties and assumptions, including without limitation, changes in economic conditions; fluctuations in currency exchange rates; changes in the competitive environment; the outcome of pending and future litigation; and the continued availability of financing and financial instruments and financial resources, they may cause actual results to differ materially from those presented in such forward-looking statements. ITOCHU Corporation, therefore, wishes to caution that readers should not place undue reliance on forward-looking statements, and, further that ITOCHU Corporation undertakes no obligation to update any forward-looking statements as a result of new information, future events or other developments. 16