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Medium-term Management Plan

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The ITOCHU Group’s previous medium-term management plan, “Brand-new Deal 2012” (the two-year plan covering the period from FY2012 to FY2013), sought to implement the basic business principles of “earn, cut, prevent.” The next medium-term management plan, “Brand-new Deal 2014” (the two-year plan covering the period from FY2014 to FY2015), is formulated to maintain these principles and achieve further growth. As well as continuing to develop the basic policies of the previous medium-term management plan, “strengthen our front-line capabilities,” “proactively seek new opportunities,” and “expand our scale of operations,” “Brand-new Deal 2014” raises the three new basic policies outlined “boost profitability,” “pursue balanced growth,” and “maintain financial discipline and lean management."

FY2014-FY2015 Medium-Term Management Plan

FY2014-FY2015 Medium-Term Management Plan

Brand-new Deal 2014 : Basic Policies

Brand-new Deal 2014 : Basic Policies

FY2014 Quantitative Plan

(billion yen)
  FY2013 Results FY2014 Plan
Gross Trading Profit 915.9 1,000.0
Operating Income 244.2 280.0
Equity in Earnings of Associated Companies 85.9 120.0
Net Income Attributable to ITOCHU 280.3 290.0
  • Due to continued growth in profits in the non-resource sector, the plan calls for Net income attributable to ITOCHU of ¥290.0 billion in FY2014, an increase of ¥9.7 billion year on year.
(billion yen)
  FY2013 Results FY2014 Plan
Total Assets 7,117 7,500
Net Interest-Bearing Debt 2,186 2,650
Stockholders' Equity 1,765 1,900
NET DER 1.2 times 1.4 times
  • The plan calls for NET DER of around 1.4 times.
  • For consolidated stockholders’ equity, taking into account the accumulation of profits and the payment of dividends, the plan calls for ¥1.9 trillion, an increase of ¥130 billion over March 31.
Assumptions FY2014 (FY2013)
Exchange Rate ¥90/$ ¥82.20/$
Interest Rate 0.3% 0.317%

Change in Investment Classification

Change in Investment Classification

Investment Policies

Over two years, the plan calls for investment of ¥800 billion on a net basis, and the maximum amount on a gross basis will be ¥1 trillion.

  • Aim for disciplined growth while maintaining financial soundness.
  • Strictly select profitable projects and facilitate investment exits through more rigorous monitoring.

Ratio of non-resource to resource investment will be 2:1.

  • We will emphasize the expansion of our earnings platform in the non-resource sector, which is one of our strengths and in which comparatively stable profits are expected, and the ratio of non-resource to resource investment will be 2:1.

Goals by Key Sector

Goals by Key Sector

Affiliate, Overseas and Human Resource Policies

Affiliate Policies

  • Strengthen monitoring of existing businesses
  • Promote liquidation / consolidation of low-efficiency businesses
  • Reinforce development of personnel who will manage operating companies

Overseas Policies

  • Continue overseas development under leadership of Division Companies
  • Cultivate strong partners in growth markets
  • Increase number of personnel stationed overseas

Human Resource Policies

  • Move ahead with reallocation of human resources, including from/to overseas offices and affiliate companies
  • Bolster overseas trainee system to foster acquisition of second languages other than English
  • Support the further development of female role models in career track

Internal Control and Corporate Governance

Risk Management

  • Strengthen consolidated risk management system and continue appropriate management of concentration risk

Internal Control and Compliance

  • Enhance internal control in accordance with the business risks in each organization
  • Continue to strengthen the overseas compliance system
  • Establish system for effective, efficient investigation and monitoring of bribery and collusive bidding risks in Japan and overseas

Corporate Governance

  • Maintain the current corporate governance system, which is based on the Board of Directors including outside directors and the Board of Corporate Auditors, a half or more of whom are outside corporate auditors.

Dividend Policy

Under Brand-new Deal 2014, we will maintain the current dividend policy.
Annual dividend targets will be: dividend payout ratio of approximately 20% on Net income attributable to ITOCHU up to ¥200.0 billion, and dividend payout ratio of approximately 30% on portion of Net income attributable to ITOCHU exceeding ¥200.0 billion.

Common information from here.