Mitsubishi Corporation New Strategic Direction: "Charting a New Path toward Sustainable Growth"
Tokyo, May 08, 2013 (JCN Newswire via COMTEX) --
Mitsubishi Corporation has developed its new management strategy, entitled New Strategic Direction (charting a new path toward sustainable growth). It goes into effect from fiscal year 2013.
Amidst major changes in Mitsubishi Corporation's business models and the external environment, we have abolished our traditional "midterm management plan" concept of committing to fixed financial targets three years in the future, in favor of a long-term, circa 2020 growth vision. To realize this vision we have set down our "New Strategic Direction", which consists of basic concepts on management policy together with our business and market strategies.
New Strategic Direction seeks to recognize our value and upside potential as a sogo shosha capable of "providing stable earnings throughout business cycles by managing a portfolio diversified by business model, industry, market and geography". As we optimize our portfolio, we will strive to realize our growth vision and enhance the Mitsubishi Corporation's overall corporate value.
Mitsubishi Corporation circa 2020: Double Business
Mitsubishi Corporation's ability to maintain stable earnings is based on its improved concept of portfolio management. Acknowledging both this strength and our company's upside potential, we have set down our circa 2020 long-term growth vision as follows:
Resource (LNG, metallurgical coal, copper) -> Double Equity Production (compared to FY2012)
Non-Resource -> Double Earnings Level (compared to FY2012)
Mitsubishi Corporation circa 2020 Portfolio Vision: Optimal Diversification & Winning Businesses
- Select "Winning Businesses" through proactive reshaping of portfolio
Reduce number of business sub-segments from current total of 47 to between 35 and 40.
- Strengthen these Winning Businesses
Reshape portfolio to consist of at least 10 business sub-segments earning more than 20 billion yen in net income, and between 10 and 15 business sub-segments earning between 10 and 20 billion yen in net income.
- 50:50 Resource to Non-Resource Asset Ratio
Create sustainable corporate value through business activities and strengthen "winning businesses" through the proactive reshaping of the portfolio in order to win competition at a global scale.
2. Investment Policy
Accelerate divestments selectively and free up capital for new investments, while continue consistent investment at a rate in line with the average of the last 3 years (under Midterm Corporate Strategy 2012) in order to improve our earnings base.
3. Financial Discipline
Increase focus on financial discipline including funding our investments within our own cash flow assuming a base earnings level of 350 billion yen per annum. Deliver a return on equity of 12-15% in the medium to long term.
4. Dividend Policy
Introduce a two-staged dividend policy with a base and a variable portion in order to provide a stable dividend (set base dividend according to a base earnings level of 350 billion yen per annum).
Market Strategy / Business Strategy
1. Market Strategy
We will accelerate our global business development by leveraging our shift towards Asian markets, which are gaining greater international presence not only as resource and industrial markets, but as consumer markets as well. Our objective will be to ensure sustainable growth by capturing growth in Asia. This will entail securing global supply sources to meet the increasing demand for raw materials and other commodities in Asia, and establishing a local presence within the region, through M&As, strategic alliances, and other proactive initiatives.
2. Business Strategy
Our resources business will be transitioning to the project development stage toward full operation, which will primarily entail expanding our existing asset base (metallurgical coal, copper, LNG, and other core assets). At the same time, we will refocus on productivity and cost, be it capital or operational, to make more efficient use of our management resources.
We will accelerate the shift of management resources to current and future "winning businesses" to realize our long-term growth vision, which aims to build multiple robust and large-scale earnings drivers. While selectively growing businesses (automotive, foods, retail, power generation and life sciences), we will be transforming our business models such as developing downstream shale gas operations in North America and shifting to industrial finance's asset management business.
Financial Projections for FY2013
Our FYE 3/2014 consolidated net income target will be 400 billion yen, up 40 billion yen from our actual earnings in FYE 3/2013. Our projected net incomes from resource and non-resource businesses are 192 and 198 billion yen respectively, both up from FYE 3/2013. In particular, we are anticipating record high earnings from non-resource businesses. We intend to maintain our usual level of investments; however, because we will be funding investments by our own earnings, we expect net DER to be around 1.0.
Based on our new dividend policy, our dividend per share should be 60 yen (assuming the variable portion's payout ratio of 30%).
About Mitsubishi Corporation
<BR /><BR />Mitsubishi Corporation (MC; TSE: 8058) is a global integrated business enterprise that develops and operates businesses across virtually every industry including industrial finance, energy, metals, machinery, chemicals, foods, and environmental business. MC's current activities are expanding far beyond its traditional trading operations as its diverse business ranges from natural resources development to investment in retail business, infrastructure, financial products and manufacturing of industrial goods. With over 200 bases of operations in approximately 80 countries worldwide and a network of over 500 group companies, MC employs a multinational workforce of nearly 60,000 people. For more information, please visit www.mitsubishicorp.com.
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