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

Investors Meeting for Food Company

December 20, 2016

2

General Overview of Food Company

 Organization

 Management Policy  Business Portfolio  Financial Highlights

Introduction of each Division

3

General Overview of Food Company

4

Total Assets：1.7 Trillion Yen (September 30, 2016)

• No. of Employees：535（As of 1st of April,2016）

Executive Vice President

Planning & Administration Dept.

Provisions Div. Fresh Food Div. Food Products Marketing & Distribution Div. CFO Food Monitor & Review Sect.

Food Safety & Compliance Management Office IT Solution Sect. Business Accounting & Control Sect. Risk Management Sect. Affiliate Administration Sect.

：retail, wholesale products, snacks, pet food ：imported branded products, food development, food service, FamilyMart related products ：corn, wheat, barley, oilseeds etc. ：Marine products ：Meat products ：Fresh Fruit, Vegetables, Juice etc. ：rice, starch, fats etc. ：sugar, coffee, confectionary, coffee, dairy

President

Food Company

Grain, Feed & Oilseeds Dept. Oil, Fats & Grain Products Dept.

Sugar, Confectionary Materials, Coffee & Dairy Products Dept.

Marine Products Dept. Meat Products Dept. Agri Products Dept. Food Products Marketing & Distribution Dept. Food Products Marketing & Development Dept.

5 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 Strength

Overseas

Retail → Wholesale → Product & Raw Material Strengthen Procurement of Raw Material

RISK RETURN

High Risk Middle Risk Low Risk High Return Middle Return Low Return

6

PROVENCE HUILES (vegetable oils)

America Europe

Raw Materials/ materials Production Wholesale Retail

HyLife (Pork) Oilseeds (vegetable oils)

QTI (High-value-added grain/ingredients for animal feed)

CGB (Corn, soy beans, wheat, milo) UNEX GUATEMALA （Coffee beans） Longda Foodstuff, etc. Longrong Zhongxin BIX ANEKA COFFEE ANEKA TUNA MEGMILK SNOW BRAND Calbee-Wings Food FamilyMart ・China ・Taiwan ・Thailand ・Vietnam ・Indonesia ・Malaysia

Japan

ITOCHU Feed Mills ITOCHU Sugar FUJI OIL Prima Meat Packers ITOCHU- SHOKUHIN NIPPON ACCESS

ITOCHU Food Sales and Marketing Subsidiaries Associated Companies

Dole CP Burra Foods (Milk powder) FamilyMart UNY Holdings Strategic business alliance & capital participation partner

Asia

EGT (Wheat、corn、 soybeans, DDGS)

Joint Ventures

Building a Worldwide Value Chain From Retail to Raw Material

7

107.1 106.5 105.4 113.1 120.9 129.8 137.0 157.5 177.2 172.3 176.1 18.0 19.0 20.0 25.0 30.0 36.0 44.1 50.8 53.9 44.9 54.1

2.0% 1.8% 1.9% 2.3% 2.6% 2.9% 3.3% 3.5% 3.2% 2.6% 3.1%

0.0% 1.0% 2.0% 3.0% 4.0% 20 40 60 80 100 120 140 160 180 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 Plan

Total assets Basic profit ROA(right axis) (Unit) Basic profit: billion yen, Total assets :10 billion yen

8

41.2 46.5 49.1 60.1 66.3 (23.0) (109.0) (50.1) (49.1) (44.1) 263.2 (275.3)

44.1 50.8 53.9 44.9 54.1

(300) (200) (100) 100 200 300 (120) (80) (40) 40 80 120 Core operating cash flows Net investment cash flows Basic profit

Familymart additional acquisition (22.4) Familymart additional acquisition (23.3) Acquisition of Dole (134.1)

FY2013 FY2014 FY2015 5yrs total (right axis) FY2016 FY2017 Plan

（Unit : billion yen）

9

5 10 15 130.0 135.0 140.0

FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 Retail Market CVS Department store Supermarket

Retail Market（Trillion yen） each categories（Trillion yen)

Trend of the categories of retail market from FY2007 to 2016

In FY2016, Retail Market has grown +4% compared with FY2007. CVS sector has led the market with +43% growth.

10

Market

FY2013 - 2017 5 Year range FY2013 - 2017 5 Year average

Overall

ROA Volatility ROA Average Return

Domestic Retail

2.5 - 4.1% Middle 3.2% Middle

Middle Risk Middle Return Domestic Wholesale

2.1 - 2.5% Low 2.3% Low

Low Risk Low Return Domestic Manufacturer

3.9 - 4.6% Low 4.0% High

Low Risk High Return Overseas Raw Material

1.9 - 4.2% High 2.7% Middle

High Risk Middle Return

11

Overseas Raw Material Domestic Manufacturer Domestic Wholesale Domestic Retail Basic profit 48% 13% 25% 14% Total assets 41% 7% 43% 9% ROA 3.6% 5.5% 1.8% 4.5% 3.6% 5.5% 1.8% 4.5%

0.0% 5.0% 10.0%

0% 25% 50%

FY2015 Composition by sectors

7.1 7.5 755.0 720.1

26.0

13.3 129.5 167.6

ROA

Overseas Raw Material Domestic Manufacturer Domestic Wholesale Domestic Retail Basic profit 47% 12% 29% 12% Total assets 37% 8% 46% 9% ROA 4.1% 4.8% 2.0% 4.4% 4.1% 4.8% 2.0% 4.4%

0.0% 5.0% 10.0%

0% 25% 50%

FY2014 Composition by sectors

6.0 6.2 728.4 582.2

24.1

14.6 124.6 139.7

ROA

Overseas Raw Material Domestic Manufacturer Domestic Wholesale Domestic Retail Basic profit 32% 18% 33% 17% Total assets 32% 8% 46% 14% ROA 2.6% 6.0% 1.9% 3.1% 2.6% 6.0% 1.9% 3.1%

0.0% 5.0% 10.0%

0% 25% 50%

FY2016 Composition by sectors

7.9 7.5 799.2 547.8

14.5

15.0 131.7 244.4

ROA

Overseas Raw Material Domestic Manufacturer Domestic Wholesale Domestic Retail Basic profit 44% 13% 27% 16% Total assets 32% 8% 45% 14% ROA 4.2% 4.8% 1.8% 3.5% 4.2% 4.8% 1.8% 3.5%

0.0% 5.0% 10.0%

0% 25% 50%

FY2017 Plan Composition by sectors

6.8 8.8 798.2 567.7

23.8

14.7 141.1 254.0

ROA （Unit : billion yen）

12

Introduction of each Division

13

Business：Retail & Wholesale business focusing on CVS and Supermarket. Import and Distribution of Final Product.

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

14

Business：Production, Manufacturing and Distribution of Marine, Meat and Agri-products.

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

15

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

Business：Handle grain and other raw materials to provide stable supply to Japan and the Asian Market.

16

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

• utcome 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.

Forward-Looking Statements