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1、INTEGRATED REPORT 2023 360business innovation.MITSUI ScCO.Corporate Management Philosophy(MVV)Build brighter futures,everywhereRealize a better tomorrow for earth and for people around the world.Mission360 business innovatorsAs challengers and innovators,we create and grow business while addressing
2、material issues for sustainable development.VisionOur core values as challengers and innovatorsValuesSeize the initiativeWe play a central role in driving transformation.We drive our collective growth by continuously growing as individuals.Embrace growthWe foster an open-minded culture and multiply
3、our strengths to achieve excellence.Thrive on diversityWe pursue worthy objectives with fairness and humility,taking pride in work that stands the test of time.Act with integrityGate 4 DataGate 3 Management FoundationGate 2 Growth StrategyGate 1 Mitsuis Value CreationPublication of the Integrated Re
4、port01Mitsui&Co.Integrated Report 2023FY March 2023 was a year that tested the abilities of corporations to respond to major changes in the operating environment.These challenges included high levels of inflation and monetary tightening,mainly in developed countries in Europe and North America,reper
5、cussions from the geopolitical situation,the continuing impact of COVID-19,and the trend toward a decarbonized society.Under these conditions,Mitsui was nonetheless able to achieve record profits as we saw our efforts to strengthen our earnings base bear fruit.In May 2023,we announced our Medium-ter
6、m Management Plan 2026,“Creating Sustainable Futures.”With sustainability at the core of our management,we will unearth social issues in all industries from the perspective of global sustainability,produce new business innovation and create strong business clusters and new industries.In last years i
7、ntegrated report,we applied a variety of perspectives to introduce Mitsuis unique way of creating value.This entailed providing real solutions to social issues by creating,growing and extending businesses to form cross-industry business clusters and thereby realize our Mission to“Build brighter futu
8、res,everywhere”as stated in our Corporate Management Philosophy(Mission,Vision,Values:MVV)in other words,Mitsuis approach of“Challenge and Innovation.”Integrated Report 2023 is the sixth integrated report we have published,and in it we systematically go through Mitsuis strategies for creating sustai
9、nable futures and how these strategies will lead to enhanced corporate value.I affirm that Integrated Report 2023 was compiled in good faith through close coordination across various units and on the basis of extensive deliberations by the Corporate Management Committee and Board of Directors.In com
10、piling this report,we referred to the Integrated Reporting Framework advocated by the IFRS Foundation and the Guidance for Collaborative Value Creation issued by the Ministry of Economy,Trade and Industry of Japan.We have also referred to input from our shareholders,investors and other stakeholders,
11、with the aim of providing a clear picture of essential information for deepening readers understanding of Mitsui.We welcome your opinions and comments on the report,and hope it will lead to constructive dialogue with our stakeholders and the collaborative creation of new value.August 2023Tatsuo Yasu
12、nagaRepresentative Director and Chair of the Board of DirectorsPublication of the Integrated ReportGate 4 DataGate 3 Management FoundationGate 2 Growth StrategyGate 1 Mitsuis Value CreationPublication of the Integrated Report02Mitsui&Co.Integrated Report 2023Editorial PolicyEditorial PolicyThe integ
13、rated reports we have published to date have conveyed the attractiveness of Mitsui&Co.,Ltd.(referred to in this document as“Mitsui”/“the Company”)from various angles.Integrated Report 2023 is our sixth such publication,and we endeavored to advance its usefulness as a communication tool by diving dee
14、per into what makes Mitsui Group attractive,while also explaining our value creation process and our growth strategy to greater corporate value based on specific examples.We hope that this report can help enhance understanding of Mitsui Groups medium-to long-term value creation in a rapidly changing
15、 business environment.Scope of Matters ReportedReporting period:April 1,2022 to March 31,2023(including some information on activities in April 2023 and thereafter)Reporting organization:Mitsui&Co.Group(Mitsui&Co.,Ltd.and consolidated subsidiaries)Reporting Guidelines ReferencedoIntegrated Reporting
16、 Framework,IFRS Foundation oGuidance for Collaborative Value Creation,Ministry of Economy,Trade and Industry of JapanoSustainability Reporting Standard,Global Reporting Initiative(GRI)oISO 26000(Guidance on Social Responsibility)Cautionary Note on Forward-looking StatementsThis report contains state
17、ments and figures regarding Mitsuis corporate strategies,objectives,and views of future developments that are forward-looking in nature,based on judgments and information available as of the publication date(August 2023),and are not simply reiterations of historical facts.Readers should be aware tha
18、t a number of known or unknown risks,uncertainties,and other factors could lead to outcomes that differ materially from those presented in such forward-looking statements.Therefore,please use the information and materials at your own discretion,by collating information from other sources.Under no ci
19、rcumstances shall Mitsui be held liable for any damages arising from the use of this report.Reports and Information Disclosure from Mitsui&Co.INTEGRATED REPORT 2023 360business innovation.MITSUI ScCO.Integrated ReportsPrepared for all stakeholders,including shareholders and investors,to capture Mits
20、uis value creation process,medium-to long-term management policies,business strategies,and financial and non-financial informationWebsiteSustainabilityUp-to-date sustainability information published by the Company Sustainability Management ESG Information Materiality Social Contribution ActivitiesWe
21、bsiteInvestorsFinancial and non-financial information is compiled for investors and shareholders Medium-term Management Plan Financial Results Investor Day Business A Report(this report):https:/ R of General Meeting of Shareholdershttps:/ Capital Report(To be issued)Explains our groups approach and
22、initiatives to human resources and value creation through human resources managementCorporate Governance Reportshttps:/ Strategies and Financial InformationESG Informationhttps:/ ReportsDetailed,comprehensive sustainability information published by the CompanyGate 4 DataGate 3 Management FoundationG
23、ate 2 Growth StrategyGate 1 Mitsuis Value CreationPublication of the Integrated Report03Mitsui&Co.Integrated Report 2023CONTENTSGate 1 Mitsuis Value Creation13 Value Creation Process14 Management Capital15 Mitsuis Strengths16 Materiality17 Mitsuis Business Model18 Collaborative Value Creation with S
24、takeholders19“Challenge and Innovation”Case StudyGate 2 Growth Strategy24 Enhancing Corporate Value through “Challenge and Innovation”25 CFO Message27 Medium-term Management Plan 34 Portfolio Management35 Financial Strategy36 CSO Message38 Sustainability Management44 CHRO Message46 Human Resources S
25、trategy49 CDIO Message51 Initiatives in Digital FieldsGate 3 Management Foundation54 Roundtable Discussion59 Directors/Audit&Supervisory Board Members61 Mitsuis Corporate Governance70 Risk ManagementGate 4 Data73 ESG Data74 Results by Operating Segment75 Segment Strategies89 Major Risk Exposure by C
26、ountry/Equity Share of Production90 5-Year Financial Data91 Company Information/Investor Information/Editors AfterwordIntroduction01 Corporate Management Philosophy(MVV)02 Publication of the Integrated Report03 Editorial Policy04 CONTENTS05 At a Glance06 Track Record of“Challenge and Innovation”07 C
27、EO MessageGate 4 DataGate 3 Management FoundationGate 2 Growth StrategyGate 1 Mitsuis Value CreationPublication of the Integrated Report04Mitsui&Co.Integrated Report 2023At a Glance(FY March 2023)Number of Affiliated Companies1513Profit for the Year1.1 trillionCore Operating Cash Flow1.2 trillionROE
28、18.9%Total Payout Ratio against Profit43.1%Worldwide Operations128 offices in 63 countriesEquity Share of Iron Ore ProductionApprox.58 million tons/yearNumber of Employees46,811LNG10 projectsin 8 countriesHealthcare Business:Number of Beds3No.1 in AsiaRaw Materials for Plastics Global Trading Market
29、 ShareParaxyleneApprox.15%Number of Trucks under ManagementNo.1 in the US2Approx.413,000 vehicles(2022)Grain and OilseedShare of Imports to Japan4AmmoniaShare of Imports to JapanApprox.60%CornApprox.20%WheatApprox.30%SoybeansApprox.30%CanolaApprox.40%1.Subsidiaries:297,Equity accounted investees:216
30、2.Number of trucks managed by Penske Truck Leasing,an equity accounted investee3.Number of licensed beds of equity accounted investee IHH Healthcare4.Share of imports by private sector business operatorsGate 4 DataGate 3 Management FoundationGate 2 Growth StrategyGate 1 Mitsuis Value CreationPublica
31、tion of the Integrated Report05Mitsui&Co.Integrated Report 20232020201020001980Facilitating the import of daily necessities and export from Japan1947 Established Daiichi Bussan Kaisha,Ltd.1959 Daiichi Bussan Kaisha integrated with other trading companies and changed name to Mitsui&Co.,Ltd.Expanding
32、initiatives in response to climate change2016 Invested in New Forests,an Australian forestry asset management business2017 Expanded distributed solar power generation business(established ForeFront Power in the US)2018 Made final investment decision on multiple LNG businessesEnriching lifestyles thr
33、ough healthcare businesses2011 Invested in IHH Healthcare,1 Asias largest private hospital group2016 Invested in DaVita Care,a dialysis clinic operator in Asia1.Current name,not the name when the investment was madeEnsuring stable supply of mineral resources and energy for Japan1965 Invested in Robe
34、 River iron ore mine in Australia1967 Establishment of an iron ore joint venture with BHP in Australia 1971 Signed a basic contract for LNG development on Das Island in Abu Dhabi1971 Invested in iron ore business in Brazil1960The rise of emerging economies and the acceleration of globalizationGlobal
35、 turbulence and increasingly complex social issuesTransition from responding to environmental issues to sustainability managementFurther strengthening functions,including logistics technologyProvided supply management functions to currently Seven&i HoldingsPlanning and development of large-scale LNG
36、 projects1985 Invested in LNG project in Western Australia1989 Invested in LNG project in QatarProgress in advanced technology development;changes in social structures020101980Track Record of“Challenge and Innovation”Post-war reconstructionRapid economic growthWe began doing business in t
37、he import and export field during Japans post-war reconstruction,and since then we have leveraged our accumulated expertise to invest in new businesses,continuously transforming our business model.In recent years,to develop businesses that contribute to solutions to worldwide issues such as climate
38、change,health and healthcare,and the stable supply of resources and materials,we continue to pursue our mission to“Build brighter futures,everywhere”through“Challenge and Innovation.”Providing real solutions for climate change2022 Invested in Mainstream Renewable Power,a renewable energy company2022
39、 Invested in large-scale renewable energy power generation business in India2022 Invested in Climate Friendly,an emissions credit developer in Australia2023 Invested in shale/tight gas asset in Texas,USImproving the quality of health,healthcare and lifestyles2019 Acquired additional shares of IHH He
40、althcare,thereby becoming its largest shareholder2021 Subscribed convertible bond of CT Corpora,a consumer-focused conglomerate in Indonesia2023 Made major domestic food service company AIM Services a wholly owned subsidiaryStably supplying resources and materials;Building schemes in areas such as m
41、obility and digital infrastructure2023 Acquired additional shares of Relia and business integration with KDDI Evolva2 2.Integrated company will be established on September 1,2023 named as Altius LinkCarrying out long-term initiatives to develop resources and energy businesses2003 Invested in Vale,a
42、major resource development company in Brazil2013 Established joint venture for Cameron LNG project in the USDeveloping infrastructure businesses that contribute to industrial development in countries around the world2004 Jointly acquired 13 power-generating assets with International Power(currently
43、ENGIE)2015 Expanded gas distribution business in BrazilResponding to new needs for enhancing industry2001 Invested in Penske Automotive Group,a diversified international transportation service company in the US2013 Established methanol production joint venture with Celanese,a major chemical company
44、in the US2015 Invested in Penske Truck Leasing,one of the largest truck leasing firms in the US2016 Invested in Gestamp Automocin,a global leader in manufacturing automotive stamped components in SpainNWS LNG ProjectIron ore mine in AustraliaFairway MethanolMount Elizabeth Novena Hospital,operated u
45、nder IHH HealthcarePenske Truck LeasingMarket CapitalizationApprox.8.2 trillion(as of the end of June 2023)Image supplied by the North West Shelf ProjectGate 4 DataGate 3 Management FoundationGate 2 Growth StrategyGate 1 Mitsuis Value CreationPublication of the Integrated Report06Mitsui&Co.Integrate
46、d Report 2023MESSAGECEO We will target new heights as a global company through our continual pursuit of“Challenge and Innovation”under Medium-term Management Plan 2026.President and Chief Executive OfficerKenichi HoriGate 4 DataGate 3 Management FoundationGate 2 Growth StrategyGate 1 Mitsuis Value C
47、reationPublication of the Integrated Report07Mitsui&Co.Integrated Report 2023Medium-term Management Plan 2026In May,Mitsui announced Medium-term Management Plan 2026 See 1 on page 11(MTMP2026)with the theme of“Creating Sustainable Futures”.What were your intentions when constructing the theme?“Creat
48、ing Sustainable Futures”is directly linked to Mitsuis mission of“Build brighter futures,everywhere.”We unearth social issues across diverse industries and from all parts of the world,and through the careful analysis of the local and industrial characteristics and the strategic setting of the timelin
49、e required to solve each issue,we offer a variety of what we call real solutions,that will lead to the creation of such brighter futures.That is why we used the plural form of“futures”in the phrasing of this mission.The businesses that create these real solutions must be sustainable in the sense tha
50、t they need to be both effective in pursuing solutions to global issues and attain a certain level of profitability.This requires the combination of strengths afforded by our global and cross-industry operations,as well as our“create,grow,and extend”business model Page 17.In other words,we need to f
51、ully understand the specific circumstances of each country,tackle global issues with cross-industry efforts,and generate innovation that extends across multiple industries.Another extremely important requirement is the development of human resources who can persevere through these processes.All of t
52、he above has been reflected in the Corporate Strategy Page 29 set out in MTMP2026.What are your thoughts on Mitsuis future shape in the context of MTMP2026?Through the implementation of various policies detailed in the plan,we aim to further open up our possibilities and push Mitsui to new heights a
53、s a global company.The future business landscape currently remains unpredictable because of the high volatility of the external environment.That is precisely why I place paramount importance on the continuation of the business portfolio reforms,which include sustained efforts to strengthen our earni
54、ngs base and incorporate highly sustainable businesses as growth investments.We have identified three Key Strategic Initiatives Page 30 for our efforts to create sustainable futures.The first is Industrial Business Solutions,in which we will provide global business solutions spanning multiple indust
55、ries,with a particular focus on domains where Mitsui is active.The second is Global Energy Transition,in which we will use Mitsuis unique capabilities to provide cross-industry real solutions that will contribute to the energy transition,which is one of the most important priorities facing the world
56、 today.The third is Wellness Ecosystem Creation,in which we will respond to the increasing diversification of consumer lifestyles and preferences by providing services that promote health across the globe,while also exploring ways to streamline healthcare costs.These three initiatives will form the
57、base of our efforts to drive growth.Since Mitsuis business operations span multiple industries on a global scale,we have a diverse array of tools to draw upon,namely the expertise,know-how and functions needed to solve our customers issues.These can be thought of as the“building blocks”which are use
58、d to solve the issues that our customers face.We are creating solutions tailored to our customers issues by forming optimal combinations of cross-industry expertise gained from our diverse business activities.Such approaches can also be found in our processes of establishing value chains for the ene
59、rgy transition and an ecosystem linking the food,nutrition,and wellness domains.When we contribute to solving issues affecting society and our customers in this way and deliver tangible results,our customers and partners are reassured by their choice and will choose us again as a partner for their f
60、uture projects.Our aim is to increase the kind of case examples that will speak volumes about why Mitsui should be the partner of choice for their future projects.Mitsui has executed a series of growth investments since announcing MTMP2026.Given the recent developments,could you tell us about your t
61、houghts on cash flow allocation?Under MTMP2026,we will drive the portfolio reforms geared toward“Creating Sustainable Futures”within our cash flow allocation framework.We will secure stable cash flows and maintain a robust balance sheet through the balanced allocation of cash to growth investments a
62、nd shareholder returns.While we have an extensive pipeline of projects for growth investments,given the prevailing business environment,we need to set higher thresholds for returns and be very selective in making investments in new projects.We always try to observe the business frontlines firsthand
63、and in a multifaceted way in order to carefully select where to invest and make good decisions.Meanwhile from a sustainability perspective,provided that there is a third party who can CEO MessageGate 4 DataGate 3 Management FoundationGate 2 Growth StrategyGate 1 Mitsuis Value CreationPublication of
64、the Integrated Report08Mitsui&Co.Integrated Report 2023responsibly take over a particular business,we will advance our portfolio reconfiguration through asset recycling,even if that business is currently yielding high returns.We have raised our target for shareholder returns to around 37%of Core Ope
65、rating Cash Flow,compared with the 33%target in Medium-term Management Plan 2023(MTMP2023).In addition,we have introduced a progressive dividend policy with a floor of 150 per share to reflect steady improvement in base profit.We will work to fulfill shareholder expectations by both executing growth
66、 investments and enhancing shareholder returns.Co-creation of Value Together with StakeholdersThis Integrated Report illustrates the relationship between our growth strategies and the enhancement of corporate value Page 24,and shows our approach toward corporate value enhancement through“co-creation
67、”with Mitsuis stakeholders Page 18.What is your thinking on the co-creation of value with stakeholders?Can you provide actual examples unique to Mitsui?Co-creation of value with our diverse stakeholders,including shareholders,investors,customers,partners,and employees,aligns precisely with our futur
68、e shape of Mitsui.To achieve this,we need to clearly present our medium-to long-term strategic direction,especially regarding how we will allocate our valuable management resources and link these strategies to value creation,and gain the support for and understanding of our strategies from our vario
69、us stakeholders.In that sense,dialogue with stakeholders is extremely important.I am especially interested in the future of globalism and committed to working with our stakeholders to create value from a broader perspective.Global Energy Transition,which is part of MTMP2026,is typical of Mitsuis app
70、roach to value co-creation with stakeholders.It will be extremely important to approach co-creation based on deep reflection about what kind of corporate activity will lead to real solutions,with a workable transition timeline,toward creating an optimal decarbonized society from CEO MessageGate 4 Da
71、taGate 3 Management FoundationGate 2 Growth StrategyGate 1 Mitsuis Value CreationPublication of the Integrated Report09Mitsui&Co.Integrated Report 2023a long-term perspective.Natural gas and LNG will play a key role in the transition towards decarbonization,and these businesses as well as various ne
72、w businesses will need to be developed into functional business models.These business models will need to be sustainable and will also need to meet our investment criteria.We will show our stakeholders how we will use innovation that emerges from our cross-industry initiatives to contribute to the d
73、ecarbonization of society,and that we will do so with our management resources and over the course of a specific period of time.Further,by transparently disclosing the actions we make in this process,we aim to gain the understanding of our stakeholders,and advance the Global Energy Transition as a f
74、irst-class global consortium.Corporate CultureWhat are your thoughts on Mitsuis corporate culture?The key values of“Challenge and Innovation“and“open-mindedness”have always been important for Mitsui.Individual employees have also taken these values to heart,and our corporate culture is manifested in
75、 our attitudes to work.Mitsui employees come from diverse backgrounds and have unique strengths.We enhance our skills through wide-ranging experiences and bring the spirit of“Challenge and Innovation”to our global endeavors.Employees respect each other,accept each other,and compete in a friendly dyn
76、amic that pushes one and other to greater heights.Employees work with this approach in teams that span multiple business units to create value through co-creation with diverse stakeholders.This Mitsui brand of inclusion See 2 on page 11 was fostered in our long-established corporate culture of“open-
77、mindedness”.These processes can be seen all the time across a number of organizations within the company,which is representative of our corporate culture and a solid advantage the company enjoys.In this sense,every individual employee is responsible for creating and passing on our corporate culture.
78、Mitsui is a stage for our valued employees to thrive on.The company provides this“stage”to allow our employees to“perform”energetically toward achieving the goals set by the company.I believe it is the true essence of our corporate culture.Our corporate culture is also closely linked to our organiza
79、tional design.A key feature of our organizational structure is the fact that the chief operating officers of our 16 business units and the heads of our overseas offices all report directly to the CEO.We have an executive management team,which consists mainly of executives in charge of specific domai
80、ns and executives in charge of corporate units,to drive the company alongside the CEO.They also collaborate closely thanks to a flat organizational structure.Because of low barriers between business units and regions,cooperation across multiple business units is the norm in Mitsui.How does Mitsuis b
81、rand of inclusion lead to the enhancement of corporate value?The key to pursuing global business,at a time of increasingly complex social issues,is the ability to offer a diverse menu of cross-industry responses to the issues and essential needs of customers.Another vital requirement is the timely f
82、ormulation of alternative plans and the preparedness of backup measures for when major changes occur in the operating environment.Mitsuis brand of inclusion allows diverse people to form effective teams across multiple industries,which naturally results in the expanded range of options we can offer
83、to customers.This is an extremely important factor in terms of being able to solve customers issues through business and creating new businesses.Inclusion also enables us to build the resilience that we need when unexpected situations arise.Stakeholder EngagementWhat do you see as important when eng
84、aging in dialogue with shareholders and investors?Dialogue with shareholders and investors is extremely important.I give the utmost importance to ensuring that,through such engagement,they gain a deep understanding of our business activities to make sense of our future vision and management policies
85、.I aim to achieve that by creating as many opportunities for dialogue as possible,and by providing information that allows them to make fixed-point observations.Another priority for me is to make sure that the advice and views I receive from these dialogues are fed back within the company and used t
86、o improve our business operations.After close dialogue with our shareholders and investors over many years,recently I come across occasions more frequently where I feel they have a comprehensive understanding of Mitsui.Mitsui has a global business portfolio encompassing a wide range of domains.That
87、said,what is common to our core businesses in each of these domains is that each of the core businesses have been acquired,enhanced,developed,and built-up over time,in the process of addressing customers CEO MessageGate 4 DataGate 3 Management FoundationGate 2 Growth StrategyGate 1 Mitsuis Value Cre
88、ationPublication of the Integrated Report10Mitsui&Co.Integrated Report 20231 Mitsui&Co.CEOs explanation of Medium-term Management Plan 2026 for employeeshttps:/ Mitsui&Co.CEO explaining his message on inclusion to employeeshttps:/ and needs,using our functions as a foundation.At first glance,Mitsui
89、may appear to be a conglomerate,but in every domain we have used the same methods to create,grow,and combine our core businesses.In undertaking the process of business portfolio reconfiguration,we always return to our core businesses eventually,and continue with the enhancement of these businesses.W
90、e take pride in this style of business management that allows us to address global-scale issues and to form international,cross-industry business clusters.To me,opportunities to discuss with investors about such management approaches are extremely valuable and exciting.Future ChallengesThis is your
91、third year as CEO.What are your thoughts on progress made so far?Also,please tell us about any challenges going forward.Since the end of MTMP2023,I have been strongly aware of a heightened sense of solidarity across the entire group.Now that a set of policies and targets have been set forth in MTMP2
92、026,I feel the growing momentum toward driving it forward as one united team by utilizing our management resources to the greatest extent possible.One reason for this is the heightened expectations of our customers.Customer expectations toward Mitsui have risen all the more because the world faces a
93、n increasingly uncertain,complex operating environment.Inspired by such expectations,there are an increasing number of employees that are motivated to respond flexibly to customer needs by forming cross-segment teams,leveraging the low barriers between our business units,a key advantage for Mitsui.A
94、lso,to be able to act in a dynamic and timely way,agile consultations with management have been on the increase of late.Since becoming CEO,I have reiterated again and again that we need to raise our growth level by two notches.The first notch up is meeting the rising expectations of our customers.I
95、believe that we are largely accomplishing this by making full use of our management resources.The second notch up is to bring about even more innovation and work more dynamically.I believe we still have so much more we can do to get to the level of that second notch.This belief is fully encapsulated
96、 in the theme of MTMP2026-“Creating Sustainable Futures”.We will respond to the expectations of our shareholders by effectively translating our cumulative pursuit of“Challenge&Innovation”into enhanced corporate value.CEO MessageGate 4 DataGate 3 Management FoundationGate 2 Growth StrategyGate 1 Mits
97、uis Value CreationPublication of the Integrated Report11Mitsui&Co.Integrated Report 2023Mitsuis Value CreationGate 113 Value Creation Process14 Management Capital15 Mitsuis Strengths16 Materiality17 Mitsuis Business Model18 Collaborative Creation with Stakeholders19“Challenge and Innovation”Case Stu
98、dyGate 4 DataGate 3 Management FoundationGate 2 Growth StrategyGate 1 Mitsuis Value CreationPublication of the Integrated Report12Mitsui&Co.Integrated Report 2023Build brighter futures,everywhereMitsuis Mission is to“Build brighter futures,everywhere.”We contribute to resolving social issues through
99、 our business activities,which leads to sustainable growth.Mitsuis strengths include a focus on human resources that has been passed down for generations and expressed as“Mitsui is People,”the corporate culture of“open-mindedness,”and a global business portfolio spanning a wide range of industries t
100、hat we have constantly transformed over decades.Through cross-industry initiatives,we provide real solutions to increasingly complex social issues.Putting“Challenge and Innovation”into practice is at the very core of Mitsuis value creation.Mitsuis Challenge and InnovationValue Creation ProcessExtend
101、GrowCreateMissionEnhancement of management capitalManagement FoundationPage 53Strengths Page 15Cross-industry initiatives providing real solutions to social issuesMaterialityPage 16Business ModelPage 17Growth Strategyfor Accelerating Our Business ModelPage 23Mitsui is PeopleOpen-mindednessBusiness P
102、ortfolioManagement CapitalPage 14Gate 4 DataGate 3 Management FoundationGate 2 Growth StrategyGate 1 Mitsuis Value CreationPublication of the Integrated Report13Mitsui&Co.Integrated Report 2023Management CapitalBy leveraging various forms of management capital we have built up over many decades,we c
103、ontribute to resolving various social issues through our business activities.Doing so further enhances our management capital and leads to the sustainable growth of the Company.Based on this management capital,Mitsui applies its strengths of“Mitsui is People,”“open-mindedness,”and its“business portf
104、olio”as sources of value creation.Human capital“Independent professionals”who leverage ingenuity to lead transformation through innovation and utilize their own strengths to create value in any industry or rolePage 46 Human Resources StrategyNumber of employees(consolidated)46,8111Employee engagemen
105、t 72%2Percentage of female managers18.8%(consolidated)8.5%(non-consolidated)Number of employees participating in overseas dispatch programs3,700+(cumulative total)1Intellectual capitalBusiness know-how cultivated as a general trading company in areas including trading and business management,and exp
106、ertise and know-how accumulated by generating innovation and developing new technologiesPassing on business know-how3Number of business cases42,500+/yearFinancial capitalA solid and sound financial base supported by disciplined portfolio management and financial strategyPage 35 Financial StrategyCon
107、solidated assets 15.4 trillionCore Operating Cash Flow1,205.5 billionProfit for the year 1,130.6 billionROE 18.9%Social capitalA brand and industry reputation built up over years,and long-term networks and relationships of trust established with a wide range of stakeholders such as business partners
108、,customers,local communities and government bodiesNumber of clients155,000+Number of offices128 offices in 63 countries/regions5Number of affiliated companies513 companies6Natural capitalNatural resources essential to Mitsuis business,crucial materials for the stable supply of mineral and metal reso
109、urces,energy,food,and other products and commodities,and forestry resources such as Mitsuis forests and overseas forestry businessesArea of Mitsuis forests in Japan approx.45,000 hectaresGHG7 Reduction Contribution2.7 million tons/yearEnergy resources Crude oil and gas reserves1.33 billion barrelsMi
110、neral and metal resources Iron ore:Equity share of production58.3 million tons/year1.As of March 31,2023 2.Based on Mitsui Engagement Survey 20223.Manuals,know-how and collections of case studies shared within the Company leading to efficient business management and promotion and creation of new bus
111、inesses4.Ringi(documents for internal decision-making:comprehend the external and internal environment,strategies,risk analysis,etc.)5.As of April 1,2023 6.Consolidated subsidiaries:297,equity accounted investees:216 7.Greenhouse gas 8.Including absorption amount381 companies overseas,132 companies
112、in Japan81,000+overseas,74,000+in Japan(Fiscal year ended March 2023)Integrated Report 2022 Page 96Gate 4 DataGate 3 Management FoundationGate 2 Growth StrategyGate 1 Mitsuis Value CreationPublication of the Integrated Report14Mitsui&Co.Integrated Report 2023Sakhalin II LNGGas-fired power plantIHH H
113、ealthcare(Hospital group)Mozambique LNGCT Corp(Consumer-focused businesses)Metallurgical Coal BusinessSteel Technologies(Flat-rolled steel processing centers)Mitsui Bussan Commodities(Commodity derivatives trading)Certis Belchim(Crop protection product sales)Abu Dhabi LNGINNER MONGOLIA ERDOS ELECTRI
114、C POWER AND METALLURGY GROUP(Ferroalloys and chemicals)Gestamp(Automotive component)AIM Services(Food service)Altius Link(Contact center)Cameron LNGITC(Chemical tank terminal)Vale(Iron ore,etc.)FPSO/Gas distributionCopper businessUnited GrainMBK Real EstateIron Ore BusinessNorth West Shelf LNGToyota
115、 CanadaPenske Group(Diversified international transportation services;truck leasing and logistics)Marcellus ShaleMitsuis StrengthsMineral&Metal ResourcesEnergyMachinery&InfrastructureChemicalsIron&Steel ProductsLifestyleInnovation&Corporate DevelopmentAs of 31 August 2023.Altius Link will be establi
116、shed on 1 September 2023.“Open-mindedness”has been one of the most important elements of the corporate culture and philosophy that has been passed down since Mitsuis establishment.Mitsuis corporate culture is such that all employees are free to create ideas and are listened to by others,regardless o
117、f position,which lies at the foundation of our track record of“Challenge and Innovation.”This enables cross-industry value creation through communication across organizational boundaries.Open-mindedness is also the strength in embracing different ideas and leveraging diversity.Open-mindednessBusines
118、s portfolioMitsui has spent decades refining its global and wide-ranging business portfolio.We continue to transform our business portfolio,creating and cultivating businesses that contribute to solving current and potential social issues and replacing businesses.This business portfolio and our abil
119、ity to continually transform it for the future is a source of Mitsuis competitiveness.Mitsui is People“Mitsui is People”expresses Mitsuis commitment,as a company,to placing the highest priority on talent development and it being a collective of independent individuals.One of our strengths lies in ou
120、r collective of highly-capable individuals with unique capabilities who think in an independent manner.These individuals respect each others uniqueness and strengths,collaborate toward specific objectives and continue to create new value.Global Business PortfolioGate 4 DataGate 3 Management Foundati
121、onGate 2 Growth StrategyGate 1 Mitsuis Value CreationPublication of the Integrated Report15Mitsui&Co.Integrated Report 2023Mitsui conducts sustainability-oriented management.We have identified Mitsuis material issues(“Materiality”)for the sustainable growth of both society and Mitsui with the aim of
122、 earning the trust and meeting the expectations of our various stakeholders as well as contributing to our Mission to“Build brighter futures,everywhere.”Materiality entails medium-to long-term risks as well as matters that present opportunities,which underlie Mitsuis business policy and strategy for
123、mation.Positioning of MaterialityWe have established Materiality Action Plans that set out specific policies,targets,and initiatives regarding Materiality at each organization,and manage and disclose current conditions and progress based on these plans.For details,please refer to the following webpa
124、ge.Materiality Action PlansIn identifying Materiality,we consider impacts on Mitsui and stakeholders from the perspective of sustainable development of society and the Company with reference to the SDGs,the United Nations Global Compact,and other international frameworks.The identification process i
125、nvolves internal and external discussions,following which approval is obtained from the Corporate Management Committee and the Board of Directors.Furthermore,we conduct reviews on a roughly three-to-five-year basis to take account of factors such as environmental changes.Identification of Materialit
126、yMaterialityMateriality OutlineApplicable SDGsSecure sustainable supply of essential productsEnsure the sustainable and stable supply of resources,materials,food,and manufactured products that are vital for the development of society.Enhance quality of lifeContribute to the betterment of living stan
127、dards,the development of local industries and respect of human rights to realize sustainable societies globally.Create an eco-friendly societyAccelerate initiatives towards environmental issues,such as responding to climate change and water resource problems,and contributing to a circular economy.De
128、velop talent leading to value creationRespect diversity and develop human resources with the competence to create innovation and new value.Build an organization with integrityStrengthen our governance and compliance as a corporate group trusted by society.Stakeholders identified for engagementVerifi
129、cation of compatibility with Mitsuis management philosophy and policiesInternational frameworks to referenceImpact on managementPerspective of business impactPeriodic reviews of MaterialityPeriodic reviews of MaterialityValue creation and resolving social issues through Mitsuis business activitiesId
130、entification of MaterialityObtaining internal and external opinionsQuestionnaire surveys of officers and employees on a global group basis,interviews with sustainability promotion officers;exchanging views with outside experts and our external directorsInternal discussion and approvalSustainability
131、Committee(organization under the Corporate Management Committee),Corporate Management Committee,Board of DirectorsPerspective of society and stakeholdersMateriality Action Planshttps:/ 4 DataGate 3 Management FoundationGate 2 Growth StrategyGate 1 Mitsuis Value CreationPublication of the Integrated
132、Report16Mitsui&Co.Integrated Report 2023Mitsuis Business ModelOpen-mindednessStrengthsStrengthsBusiness portfolioMitsui is PeopleWe are constantly transforming our global and wide-ranging business portfolio by creating new businesses,nurturing them into core businesses,and forming business clusters
133、with adjacent businesses.Cross-industry initiatives are necessary to provide real solutions to complicated social issues that cannot be easily resolved by a single business or industry.Mitsui is contributing to resolving complex social issues by creating even greater value through the formation of c
134、ross-industry business clusters.Accelerating business creation and growth through trading functionsIssue complexity/Amount of value providedBreadth of offering capabilitiesCreateIdentifying new business needsGrowExpansion of core businessExtendForming business clusters by combining the core business
135、 with adjacent businessesThrough its trading operations,Mitsui has cultivated expansive networks comprising its customer base and business partners,and leveraged these networks to carry out business investments and accelerate the enhancement of business value by providing trading functions.These bus
136、inesses subsequently lead to new trading opportunities and further network expansion.Seed of core businessPage 19 Create,Grow,Extend in the Field of MobilityCore businessCore businessAdjacent businessAdjacent businessCore businessCore businessCore businessAdjacent businessAdjacent businessPage 21 Fo
137、rming Food and Nutrition Wellness EcosystemForming cross-industry business clustersProviding cross-industry real solutions to social issuesGate 4 DataGate 3 Management FoundationGate 2 Growth StrategyGate 1 Mitsuis Value CreationPublication of the Integrated Report17Mitsui&Co.Integrated Report 2023C
138、ollaborative Creation with StakeholdersHIGHLIGHTSocial Contribution Activitieshttps:/ contribution activities:Mitsui SASUGAKU AcademyMitsui considers measures to help resolve the issues faced by society through its businesses,and has continued to transform its business portfolio in order to provide
139、real solutions.There are many social issues that cannot be resolved by Mitsui alone,so collaboration with business partners,local communities and governments,and other stakeholders is essential.We therefore focus on dialogue with our stakeholders,work to assess the impact of our business activities
140、on society,and identify relevant stakeholders with whom to proactively engage.Through stakeholder dialogue,each of our employees and executives gains a firm grasp of the expectations and demands of society,enabling them to engage in collaborative creation with stakeholders,through which we continue
141、to create value in a way unique to Mitsui.Dialogue|Mitsui&Co.s Model for Creating Opportunities alongside Decarbonization by Building Improved Quality Deals|Nomura Asset Management https:/global.nomura-am.co.jp/responsibility-investment/investors/feature/trptalk_mitsui.htmlWe hold regular stakeholde
142、r dialogues on sustainability issues.These serve as a forum for experts,young people and other external stakeholders to engage with Mitsui employees.In the fiscal year ended March 2023,we discussed natural capital including biodiversity and business with Yasushi Hibi(Managing Director,Conservation I
143、nternational Japan)and Makoto Haraguchi(Fellow,MS&AD InterRisk Research&Consulting).We also conduct social contribution activities in the key areas of environmental conservation,community contribution and human resources development,with a view to resolving societal issues and fostering relationship
144、s of trust,based on dialogue with a broad range of stakeholders.In the fiscal year ended March 2023,we conducted a total of 329 social contribution activities in 38 countries.Alongside our business activities in countries and regions around the world,through these activities we are making a social c
145、ontribution that will advance the sustainable development of society and our company.For details,please refer to the sustainability section of our website.Stakeholder Dialogues/Social Contribution ActivitiesIn focusing on dialogue with shareholders and investors,we utilize the insights we gain throu
146、gh this dialogue to improve management and enhance corporate value.In the fiscal year ended March 2023,we held a total of approximately 350 meetings with investors and shareholders,about 50 of which were handled by senior management(CEO and/or CFO).We also proactively engage in dialogue through vari
147、ous IR briefings including financial results announcements and Investor Day activities.The main themes are:business status and outlook,growth strategies,shareholder returns,portfolio management,governance effectiveness,and the status of our responses to climate change.Shareholder and investor opinio
148、ns and concerns discovered through this dialogue are shared widely,from the Board of Directors and Corporate Management Committee through to each business unit,used as reference data in formulating management strategies,including the new Medium-term Management Plan,and are also linked to enhancing i
149、nformation disclosure and improving IR activities.As an example of our dialogue with shareholders,see the following discussion with our CEO and the CEO of Nomura Asset Management Co.,Ltd.,which can be accessed from their website.Collaborative CreationStakeholdersMain Forms of EngagementSecure sustai
150、nable supply of essential productsEnhance quality of lifeCreate an eco-friendly societyStable supply of resources,food,and other goods Page 19 Create,Grow,Extend in the Field of MobilityContributions to improving health and quality of life Page 21 Forming Food and Nutrition Wellness EcosystemInitiat
151、ives responding to climate change Page 39 “Challenge and Innovation”in Next-generation FuelsLocal Communities Engagement through business Social contribution activitiesBusiness Partners&Consumers Engagement through business Response to inquiries by phone,email,etc.Publications Supplier questionnaire
152、s and survey to real-world conditionsNPOs&NGOs Participation in policy councils Personnel exchange (acceptance of trainees,etc.)Activities through business and industry groupsGovernment Bodies Support for research and activities Response to inquiries by email,etc.Develop talent leading to value crea
153、tionBuild an organization with integrityPromotion of globally diverse individualsPage 46 Human Resources StrategyStrengthening governance,spreading integrity Page 61 Mitsuis Corporate GovernanceEmployees Exchange of opinions with management Engagement surveys Exchange of opinions with labor union In
154、ternal consultation contact pointsEnhance corporate valueProfit generation,shareholder returnsShareholders&Investors General meeting of shareholders,various IR briefings Website,various publications Engagement through one-on-one IR meetings Dialogue through briefings for individual investorsDialogue
155、 with Shareholders and InvestorsGate 4 DataGate 3 Management FoundationGate 2 Growth StrategyGate 1 Mitsuis Value CreationPublication of the Integrated Report18Mitsui&Co.Integrated Report 2023Take on challenges in the field of mobility toCreate,Grow,ExtendBusiness clustersFY March 2026(Target)9Decar
156、bonizationStrengthening of R&D functionsConstruction and miningUtilize comprehensive trading company functionsPursuit of synergies with existing businessesDevelopment of adjacent businesses*Supply chain solutions business cluster:Sales and service network centered on import,wholesale and retailEurop
157、eAsia North AmericaAustraliaCentral and South AmericaCapture growth in Asia to form sizable business clustersPursuit of stronger business clustersSupply chain solutions business cluster*Finance business clusterDX solutions business clusterConstruction and mining solutions business clusterSupply chai
158、n solutions business cluster*Fleet management business clusterFleet management business clusterSupply chain solutions business cluster*Finance business clusterCreate,Grow,Extend in the Field of Mobility“Challenge and Innovation”Case Study 1 Light vehicles Commercial vehicles and freight transportati
159、on Construction and mining machinery Zero-emission vehicle-related/other3FY March 2023Business clustersWe“created”businesses leveraging the strong relationships with partners,“grew”them over several decades,and built a large-scale mobility infrastructure.We will further advance these initiatives in
160、Medium-term Management Plan 2026.In North America,we will pursue synergies with Penske Group and other existing businesses,and develop businesses in adjacent fields.In Central and South America,we aim to create stronger business clusters through collaboration between existing businesses and the acqu
161、isition of new functions.In Asia,we will collaborate with local partners to form sizable business clusters,backed by economic growth in each country.Through these initiatives,as well as activities in other regions,we will expand our business clusters in the mobility field from the current three to n
162、ine.Gate 4 DataGate 3 Management FoundationGate 2 Growth StrategyGate 1 Mitsuis Value CreationPublication of the Integrated Report19Mitsui&Co.Integrated Report 2023Co-creation with Japanese manufacturersCreate businesses based on our strong relationshipsCo-creation with leading local partnersDeepen
163、relationships and work together to develop businessEnhancing corporate value through the Board of DirectorsImprove the effectiveness of the Board of Directors and promote autonomous,self-driven systems at each Group companyStrengthening Group managementStrengthen cooperation between Group companies
164、and optimize Group management functions led by Mitsui head officeLocally rooted operationsDispatch human resources to become familiar with local operations and conduct and expand business Providing added value that leverages our strengthsDevelop businesses and cooperate in adjacent areas based on ex
165、isting businessesNorth America(United States)Central and South America(Chile)Entered commercial vehicle sales1980s1980sEstablished import sales agencyEntered parts and vehicle distribution business1960sEntered logistics businessEstablished finance companyRolled out finance business to Peru1998Invest
166、ed in a fleet management company(currently Mitta3)2018Made Mitta a subsidiary20222022Invested in PAG12001Invested in PTL2 and integrated into our logistics business2015Expanded into Indonesia with PTL and local partnersOngoing initiativesMedium-term Management Plan 2026Extend(Form business clusters
167、with adjacent businesses)Grow(Expand core business)Create(Identify new business needs)Light vehiclesCommercial vehicles and freight transportation1.PAG:Penske Automotive Group in the US 2.PTL:Penske Truck Leasing,a company in the PAG Group 3.Mitta:Inversiones Mitta owned by Autorentas del PacficoCre
168、ate,Grow,Extend in the Field of Mobility“Challenge and Innovation”Case Study 1Challenge in development of adjacent businesses and overseas expansionChallenge in strengthening of collaboration between individual companies and acquisition of new functionsAcquire additional share in PTLFurther deepen r
169、elationship with PTLDevelop business and cooperate in adjacent fieldsInvest in PAG starting with the commercial vehicle sales businessDeepen relationship with PAG and become strategic partnersTake advantage of opportunities to invest in PTLOngoing management improvements and strengthening of competi
170、tivenessNurturing business seeds into core businessesExpand value chain from upstream to downstreamPromote collaboration between individual companiesPromote localization of managementFlexible decision-making on the business frontlinePAGPTLLogisticsCommercial vehicle salesPAGLogisticsCommercial vehic
171、le salesImport sales agencyFinanceImport sales agencyFleet management FinancePTLPAGAdjacent businessesAdjacent businessesAdjacent businessesCommercial vehicle salesExpansion into other countriesImport sales agencyFleet management FinanceAdjacent businessesAdjacent businessesAdjacent businessesGate 4
172、 DataGate 3 Management FoundationGate 2 Growth StrategyGate 1 Mitsuis Value CreationPublication of the Integrated Report20Mitsui&Co.Integrated Report 2023Forming Food and Nutrition Wellness Ecosystem“Challenge and Innovation”Case Study 2Stable supply of foodWellness business clusterFood and nutritio
173、n value chainAnimal HealthWe supply vaccines and veterinary drugs,and cooperate with our long-established animal nutrition business to address disease resistance,environmental impact reduction,and other issuesGlobal logistics functions have been consolidated under the Logistics Strategy Division,est
174、ablished as a corporate unit and Mitsui Bussan Trade Services,a subsidiary specializing in trade procedures and logistics arrangements,thereby enhancing Mitsuis overall logistics proposal ability,competitiveness and practical capabilities.1.Consolidated and Optimized LogisticsConsolidating our logis
175、tics and integrating logistics data have enabled us to select the most suitable combinations of logistics partners for our diverse supply chains,thereby reducing costs by approximately 4 billion annually(estimate for the fiscal year ended March 2022).3.Pursuit of Advanced Logistics Functions and Ris
176、k ManagementWe have deployed our expertise in logistics areas including diagnostics,improvement and digital transformation to support advances in logistics functions that help enhance our affiliates corporate value;utilized supply chain optimization and inventory reduction to optimize logistics cost
177、s(e.g.,an inventory reduction project for an overseas affiliate contributed to an improvement in cash flow totaling approximately 4 billion over five years);unified our crisis management response related to various domestic and international regulations and to logistics functions;and upgraded the fr
178、amework for our business continuity plan.Seeds and Animal BreedingWe have genetics that have been modified for disease resistance,enhanced growth and flavor,and other features to meet needs for improved productivity and better taste in agriculture and livestock farming.NutritionIn response to growin
179、g needs for health promotion and prevention,we are working on science-based prevention measures that combine testing with solutions,with personalized healthcare as a keyword.Seeds and animal breedingProcessed foodsTesting and diagnosisCropsFood serviceHospitals and clinicsNutritionPharmaceuticalsPro
180、teinFeedFunctional ingredientsHealthcare staffingFertilizer and crop protectionAnimal healthInitiatives for protein supply2.Global Network100 logistics specialists in Japan and overseas meet the needs worldwide.Logistics Functions That Support Stable SupplyLogistics Strategy DivisionMitsui Bussan Tr
181、ade ServicesConsolidated and optimized logistics to support Group-wide solutionsGlobal network that accommodates local needsPursuit of advanced logistics functions and risk management213Initiatives for healthcare through foodPage 22In light of diversifying consumer needs and increasing health consci
182、ousness,we are working to provide preventive care through healthy food.We are promoting initiatives to create added value in areas such as deliciousness,nutrition,and health,and across the entire value chain,in addition to establishing a system for stable supply.Reducing environmental impact in food
183、 production is another important initiative.Page 22Gate 4 DataGate 3 Management FoundationGate 2 Growth StrategyGate 1 Mitsuis Value CreationPublication of the Integrated Report21Mitsui&Co.Integrated Report 2023Expanding from Trading into Production and Processing Business Established a stable procu
184、rement system by securing supply sources in multiple regions and combining the North American grain collection business and other assets with our procurement functions Formed business cluster by business diversification to production and processing Expanded volume for Japanese market through diversi
185、fication and formation of a business clusterBuilding a Sustainable Protein Supply System Expanding into the animal breeding business in the upstream value chain Securing supply sources in optimal locations globally Leveraging the animal breeding business to improve the quality of protein business gl
186、oballyLaunch of Contract Food Service Business Founded in 1976;the first project was the employee cafeteria of Mitsui Leveraged the Groups comprehensive strengths to establish a new business model by expanding the contract food service business for workplace dining and launching a contract food serv
187、ice business for schools,hospitals and medical facilities Expanding Business through Diversification Rolled out the business to sports facilities Established a nutrition management system that is effective in maintaining healthCollaborating on Initiatives in Healthcare and Nutrition Deepening the he
188、alth management system and expanding our menu of offerings to include health promotion and preventive careObjective/BenefitsFood ProvidedHealth support by life stagePreventive careHealthy mealsHospitals and medical facilitiesHealth support mealsTherapeutic and nursing care mealsSports nutritionPhysi
189、cal fitness and performance improvement,condition managementMeals for athletes育Business Expansion through Initiatives such as Health Promotion and Preventive Care through FoodBuilding a Foundation for Stable Food Supply in Japan Began postwar import of grains to JapanWorkplaceProcurement functionsFe
190、ed productionPort infrastructureGrain collection businessChicken breeding and processingWorkplaceHospitals/Medical facilitiesSchoolsSports facilitiesForecast of Invested Capital in Protein BusinessShare of Feed Grains and Oilseeds Imported to Japan(Market share for Japan)Corn:Approx.20%Wheat:Approx.
191、30%Soybeans:Approx.30%Canola:Approx.40%FY March 2023,ActualInvested capital 240 billionROIC Approx.6%FY March 2026,Target380 billionApprox.8%Initiatives for Sustainable Protein SupplyEstablishing a sustainable protein supply system that reduces environmental impact has become a necessity due to risi
192、ng demand accompanying population growth,economic development,and improvement in living standards,as well as rising environmental awareness.We are utilizing our accumulated expertise and will take this business model that we have developed in Japan and expand into overseas.Forming Food and Nutrition
193、 Wellness Ecosystem“Challenge and Innovation”Case Study 2Initiatives for Healthcare through FoodLeveraging expertise gained in our contract food service business,which started with workplace dining,we provide food that addresses growing health consciousness.In addition,we aim to further expand busin
194、ess through collaboration with healthcare and nutrition initiatives such as preventive care through food.Postwar onwardEstablishment onward1990s onward1960s onward2010s onward2020s onwardExtend(Form business clusters with adjacent businesses)Grow(Expand core business)Create(Identify new business nee
195、ds)Initiatives for Protein SupplyInitiatives for Healthcare through FoodProcurement functionsPort infrastructureGrain collection businessFeed productionSeeds and animal breedingAquaculture and processingChicken breeding and processingWorkplaceSchoolsHospitals/Medical facilitiesProcurement functionsP
196、rocurement functionsFeed productionGate 4 DataGate 3 Management FoundationGate 2 Growth StrategyGate 1 Mitsuis Value CreationPublication of the Integrated Report22Mitsui&Co.Integrated Report 2023Growth StrategyGate 224 Enhancing Corporate Value through“Challenge and Innovation”25 CFO Message27 Mediu
197、m-term Management Plan34 Portfolio Management35 Financial Strategy36 CSO Message38 Sustainability Management44 CHRO Message46 Human Resources Strategy49 CDIO Message51 Initiatives in Digital FieldsGate 4 DataGate 3 Management FoundationGate 2 Growth StrategyGate 1 Mitsuis Value CreationPublication o
198、f the Integrated Report23Mitsui&Co.Integrated Report 2023Enhancing Corporate Value through“Challenge and Innovation”Linking Our Growth Strategies to Greater Corporate ValueExpand Management Capital and Foundation Backed by the Open-minded Corporate CultureImprove the Business Portfolio by Implementi
199、ng“Create,Grow,Extend”Enhance corporate valueImprove the business portfolioMaterialityMaterialityMitsui will enhance its corporate value by creating value,improving growth potential and reducing cost of capital.Through initiatives aimed at creating value in collaboration with our stakeholders,improv
200、ing our business portfolio,and expanding and strengthening our management capital and foundation,we will create economic and social value in the form of real solutions to social issues,improve growth potential by shifting our owned assets to areas with high potential for earnings and growth,and redu
201、ce our cost of capital by building mechanisms and systems to lower future risks.In Gate 2 Growth Strategy,we explain our growth Strategy and specific measures to effectively implement the above initiatives,and in Gate 3 Management Foundation we explain the corporate governance that supports us in do
202、ing so.Create value in collaboration with stakeholdersExpand and strengthen management capital and foundationCreate value Creation of social and economic value in the form of real solutions to social issuesReduce cost of capitalConstructing mechanisms and systems to lower future risksImprove growth
203、potential Shift or replacement of owned assets to areas with high potential for earnings and growth Secure sustainable supply of essential productsEnhance quality of lifeCreate an eco-friendly societyPage 46 Human Resources StrategyStrategyStrategyStrengthen Group management capabilitiesPromotion of
204、 globally diverse individualsStrengthen governanceDevelopment of capable individualsInclusionStrategic assignment of personnelDeeper Sustainability ManagementEnhance ability to make global,cross-industry proposalsStrategic recyclingPromote business modelsExtendGrowCreateResource allocation to Key St
205、rategic InitiativesDevelop talent leading to value creationBuild an organization with integrityKey Strategic Initiatives1 Industrial Business Solutions2 Global Energy Transition3 Wellness Ecosystem CreationGate 4 DataGate 3 Management FoundationGate 2 Growth StrategyGate 1 Mitsuis Value CreationPubl
206、ication of the Integrated Report24Mitsui&Co.Integrated Report 2023What are your thoughts as you reflect on Medium-term Management Plan 2023?With the COVID-19 pandemic,supply chain disruption caused by the situation in Russia and Ukraine,rampant inflation,and other factors,the three-year period cover
207、ed by Medium-term Management Plan 2023(MTMP2023)tested our ability to respond to changes in the external environment.Demand from customers and partners for solutions to various challenges increased,and there were many opportunities for us to demonstrate our capabilities and expand our businesses.As
208、a result,we were able to develop a robust business portfolio and achieve solid results.Although there was a delay to certain growth investments due to the pandemic,we enhanced our pipeline of quality investment projects,and have been making steady progress toward investment execution in the fiscal y
209、ear ending March 2024 and beyond.Inspired with confidence gained from the successes of MTMP2023,Medium-term Management Plan 2026(MTMP2026)is off to a good start.While building upon and taking strategies and policies from MTMP2023 to the next level,we aim to further enhance our management foundation
210、and earnings base.What is your approach to cash flow allocation Page 31 under MTMP2026?We will further enhance our cash flow management.Under MTMP2023,investors appreciated the clarity of our approach to cash flow allocation,so we will continue along this path.As of MTMP2026s announcement in May 202
211、3,we guided to 1.17 trillion yen being allocated to growth investments(for which decisions have already been made or policies confirmed)to be made by the end of the term.Moving forward,while carefully selecting investment projects from our pipeline of potential candidates,we will distribute addition
212、al capital through the Management Allocation framework.In terms of shareholder returns,based on stable Core Operating Cash Flow we increased our target for shareholder returns as a percentage of Core Operating Cash Flow(on a cumulative basis for the three years of the plan)from 34%under MTMP2023 to
213、around 37%.Moreover,to date we have continued to increase dividends and,given that we are forecasting further increases in base profit during the period of MTMP2026 we have introduced a progressive dividend with a minimum full-year dividend of 150 yen per share.How do you plan to advance portfolio m
214、anagement Page 34 during MTMP2026?Corporate Management Committee members,who oversee each business unit,are playing a greater role in the rigorous selection of growth investments.Dialogue between Executive Officers and Chief Operating Officers is helping to ensure that,more than ever before,discussi
215、ons are made on a Company-wide perspective.In addition to business robustness and profitability,we place focus on size,strategy,scarcity,and the likelihood of immediate contribution to results.Discussions also now consider the compatibility of projects with the Key Strategic Initiatives of MTMP2026,
216、the formation of business clusters,and our efforts to further deepening sustainability management.On the investment side of the business for example,we penetrate into a particular industry through our involvement in trading businesses,and then use the expertise and presence that we gain there to mak
217、e investment decisions which will be based on our deep understanding of that particular business.This enables us to pursue returns that outweigh the risks in each industry.In working to improve the quality of our business portfolio,we have been highlighting the importance of the“middle game.”Under t
218、he CFO MessageWe will communicate the growth story of Mitsui by further advancing our portfolio management,and showing the progress we make in portfolio quality improvement and execution of growth investments.Representative Director,Senior Executive Managing OfficerChief Financial OfficerTetsuya Shi
219、getaGate 4 DataGate 3 Management FoundationGate 2 Growth StrategyGate 1 Mitsuis Value CreationPublication of the Integrated Report25Mitsui&Co.Integrated Report 2023“Create,Grow,Extend”business model,middle game refers to the“Grow”phase.We aim to reinforce our businesses by having a strong middle gam
220、e,by formulating a number of business scenarios that will enable us to respond to changes in the operating environment and implement strategic measures ahead of schedule,or at the optimal time.Furthermore,under MTMP2023 we began using ROIC as an indicator that links the company wide ROE target with
221、asset efficiency in each segment,and have thereby been enhancing the quality of our portfolio reviews.We conduct dynamic analyses of ROIC targets,taking into account the fact that risks and lifecycle stages of each business differ.Our ROE target in MTMP2026 is an average of over 12%over the three ye
222、ar period,a figure that exceeds the cost of equity.We aim for sustained ROE enhancement through improved earnings,an optimal capital structure,and enhanced shareholder returns.What are your thoughts on the execution of Mitsuis growth strategies and corporate value enhancement through value creation?
223、Page 24At Mitsui,we create value by using the global expertise and functions from our various segments to provide cross-industry real solutions to social issues emerging due to major changes in the external environment.As such,our business activities are a source of both social and economic value,an
224、d the associated results and expectations are directly connected to enhancement of our corporate value.One representative example is the global energy transition,which we support by balancing the stable supply of existing energy sources with the development of new energy sources for the future.Elsew
225、here,in responding to heightened consumer health needs by building a wellness ecosystem that combines food and nutrition Page 21 ,we are creating social and economic value through the provision of healthy foods for preventive care and therapeutic foods for hospitals.More complex social issues come w
226、ith more complex risks.How are you addressing such risks?At present,the complexity of global risks is increasing in terms of geopolitics,supply chains,ESG,and cybersecurity,for example,and our risk management response must address more aspects and with a greater level of sophistication.For us to enh
227、ance our corporate value,in addition to improving profitability and growth potential in each segment,risk management Page 70 is essential to our ability to support our businesses and control uncertainties into the future.At Mitsui,we conduct integrated risk management,through which we promote multil
228、ayered collaboration between the business units and Corporate Staff Divisions,and also among the various Corporate Staff Divisions.Moreover,the Portfolio Management Committee holds regular discussions and reports its findings to the Corporate Management Committee and the Board of Directors.Moving fo
229、rward,we will work to further advance these mechanisms and initiatives and incorporate them into our portfolio management.What insights have you gleaned from dialogue with shareholders and investors?For me,dialogue with our shareholders and investors is a top priority.Since becoming CFO last year,I
230、have shared with them the details of our management policies and discussions,focusing on clear communication and explanations using specific examples.Their opinions and suggestions provide many insights,which I have proactively relayed in-house to be reflected in management discussions and improveme
231、nts.We are sometimes told that our business model is difficult to understand,but nevertheless,I feel as though the transparency of our management has been increasing through this dialogue.Looking ahead,I will thoroughly monitor the progress of the policies and strategies in MTMP2026.By regularly dis
232、closing the progress of new investment projects and showcasing our track record,I hope to be able to build trust in our businesses among shareholders and investors,and in turn lower our cost of capital.We have our sights on many potential impactful projects for growth investment,and as such I will c
233、ontinue to communicate Mitsuis value creation story to hopefully generate high expectations for our future growth.Gate 4 DataGate 3 Management FoundationGate 2 Growth StrategyGate 1 Mitsuis Value CreationPublication of the Integrated Report26Mitsui&Co.Integrated Report 2023Medium-term Management Pla
234、nCorporate Strategy and Key Initiatives Evolution of portfolio strategy Reinforced group management structure Enhanced capacity for global development Innovation for the next generationKey Strategic Initiatives Hydrocarbon chain Mineral resources and materials,food and agriculture Infrastructure,mob
235、ility Medical and healthcare Lifestyle products and value-added services Build a robust profit base and thoroughly strengthen existing businesses Establish selected new growth areas Cash flow focused management;strengthen financial base Enhance governance,personnel,and innovation functionsCore Field
236、s Mineral&Metal Resources Energy Machinery&Infrastructure;Chemicals Growth Fields Mobility Healthcare Nutrition&Agriculture Retail Services Strengthen business management capability and profitability Evolve financial strategy and portfolio management Human resources strategy Strategic Focus,pursue n
237、ew business Sustainability management and evolution of ESGStrategic Focus Energy Solutions Healthcare/Nutrition Market Asia Enhancement of ability to make global,cross-industry proposals Promotion of“Create,Grow,Extend”Deeper sustainability management Strengthening of group management capability Pro
238、motion of globally diverse individualsKey Strategic Initiatives Industrial Business Solutions Global Energy Transition Wellness Ecosystem Creation Priority AreasChallenge&Innovation for 2020(FY March 2015FY March 2017)Driving Value Creation(FY March 2018FY March 2020)Medium-term Management Plan 2023
239、Transform and Grow (FY March 2021FY March 2023)Medium-term Management Plan 2026Creating Sustainable Futures(FY March 2024FY March 2026)Expanding and strengthening the earnings baseExpanding our business base with a focus on the environment and healthFocusing on energy transition initiatives amid the
240、 trend toward decarbonizationForming business clusters in areas such as mobility,chemicals,and healthcareImproving the quality of our business portfolio and forming cross-industry business clusters2020:Announced new Corporate Management Philosophy(MVV)Introduced ROIC managementWe executed the Corpor
241、ate Strategy set forth in Medium-term Management Plan 2023 and worked to strengthen our business management capabilities and profitability,evolve portfolio management,and promote business and accumulate assets in our Strategic Focus areas.In addition,we successfully advanced our human resources stra
242、tegy and sustainability management.Outcomes of Corporate StrategyCorporate Strategy(MTMP2023)OutcomesStrengthen business management capabilities and profitability Improving quality of our business portfolio,enhancement of earnings power and ROE through utilization of ROICEvolve financial strategy an
243、d portfolio management Allocated capital through Management AllocationHuman resources strategy Development of capable individuals,Diversity&Inclusion,appropriate allocation of human resources,productivity improvementStrategic Focus,pursue new business Initiatives in LNG,hydrogen,and ammonia,and buil
244、t businesses related to healthcare and preventive care,strengthening of financial position Built growth investment pipelineSustainability management and evolution of ESG Established and expanded disclosure of climate change action roadmap as well as stock-based remuneration plan for management based
245、 on KPIs for ESGReview of Medium-term Management Plan 20232019:Review of Materiality 2015:Identification of MaterialityPage 16Page 16Medium-term Management PlanThe Transition of Medium-term Management PlansGate 4 DataGate 3 Management FoundationGate 2 Growth StrategyGate 1 Mitsuis Value CreationPubl
246、ication of the Integrated Report27Mitsui&Co.Integrated Report 2023Mitsui has been enhancing shareholder returns based on cash flow generation,which it has made stronger through improvement in the quality of its business portfolio.When we announced Medium-term Management Plan 2023,we set a target of
247、increasing the ratio of shareholder returns to Core Operating Cash Flow over the cumulative three-year period,compared with the results of the previous Medium-term Management Plan.We subsequently set the target at 33%,and ultimately achieved 34%.In the Medium-term Management Plan 2026,we set the tar
248、get around 37%and newly introduced a progressive dividend.Enhancement of Shareholder ReturnsShare repurchase amount(left axis)Total dividend amount(left axis)Dividend per share(right axis)2000002242026(Fiscal years ending March)120()4
249、0602004005003002001000Shareholder Returns as a Percentage of Core Operating Cash Flow34%23%28%500 billionOver 1trillion380 billionDividend per share12%CAGR over past 15 yearsTotal payout amount(billion)progressive dividend*around 37%Core Operating Cash Flow(left axis)Profit(left axis)Iron ore prices
250、(right axis)Crude oil prices(right axis)160120(billion)(US$/barrel,ton)400801,0001,400800600400200-10001,200200920000022202320242026(Fiscal years ending March)Downside Resilience and Growth of Core Operating Cash FlowChallenge&Innovation for 2020Driving Va
251、lue CreationMedium-term Management Plan 2023Transform and GrowMedium-term Management Plan 2026Creating Sustainable FuturesResilience to downward pressure in cash flowCapture the upside by improving the quality of our business portfolio*Covers the 3-year period of Medium-term Management Plan.Progress
252、ive dividend in which the dividend level is maintained or increased with a minimum annual dividend of 150 JPY per shareRecord highCore Operating Cash Flow1,205.5 billionProfit1,130.6 billionMedium-term Management PlanThe Transition of Quantitative PerformanceGate 4 DataGate 3 Management FoundationGa
253、te 2 Growth StrategyGate 1 Mitsuis Value CreationPublication of the Integrated Report28Mitsui&Co.Integrated Report 2023Medium-term Management PlanOverview and Strategies of Medium-term Management Plan 2026Advanced trading company functions(logistics,risk management,finance,digital,etc.)Operational e
254、xcellence in the frontlineBusiness portfolio and untapped portfolioGlobal customers and partnersGroup of diverse individualsDigital transformation(DX)Green transformation(GX)Striving for even greater heights as a global companyCombining Global,Cross-industry Expertise and StrengthsCreating Sustainab
255、le Futures Unearth social issues in all industries from the perspective of global sustainability,produce new business innovation and create strong business clusters and new industriesThemeThe world is facing global challenges;real solutions require the combination of expertise and know-how The world
256、 is facing global social challenges such as responding to heightened geopolitical risks and changes in supply chains,balancing a stable energy supply with carbon neutrality,maintaining water resources and food as forms of natural capital,and increasing health awareness and diversification of lifesty
257、lesOperating EnvironmentProviding real solutions to social issues as a global company Creating solutions by combining cross-industry expertise from various cross-industry businesses The“Partner of Choice”for the next project A continuously expanding earnings base and pipeline of quality investmentsV
258、ision under the Medium-term Management Plan 2026Establish Corporate Strategy(1)Enhancement of Ability to Make Global,Cross-Industry Proposals,as the basis for further accelerating the combination of our strengths by leveraging our global matrix structureGlobal Matrix StructureAmericaAsia-PacificEuro
259、peEast Asia and South KoreaMiddle East and AfricaCISJapanGlobal,local,and regional cooperationMineral&Metal ResourcesEnergyMachinery&InfrastructureChemicalsIron&Steel ProductsLifestyleInnovation&Corporate DevelopmentCorporate Staff DivisionsCross-industryFusion of strengthsFive Corporate StrategiesW
260、e have established five Corporate Strategies for continuing to reform the actions and mindsets of our people and organizations,as well as company-wide systems,through which we will achieve the goals of Medium-term Management Plan 2026.(1)Enhancement of ability to make global,cross-industry proposals
261、(2)Promotion of“Create,Grow,Extend”Page 17 Mitsuis Business Model(3)Deeper sustainability management Page 38 Sustainability Management(4)Strengthening of group management capability Page 33 Case Studies of Initiatives to Strengthen Group Management Capabilities(5)Promotion of globally diverse indivi
262、duals Page 46 Human Resources StrategyCompany-wide StrategyCombining global and cross-industry strengthsPage 29 Combining Global and Cross-industry Expertise and Strengths Lowers the barriers between business units and regions to enable flexible and dynamic collaboration Enables us to resolve issues
263、 on a global scale through the combination of cross-industry approaches and know-howFeatures of Matrix Structure Regional diversification of businesses Local production for local consumption Horizontal expansion of business models Utilization of contact points in a wide range of industries Initiativ
264、es in adjacent areas of core businesses Complex solutionsGate 4 DataGate 3 Management FoundationGate 2 Growth StrategyGate 1 Mitsuis Value CreationPublication of the Integrated Report29Mitsui&Co.Integrated Report 2023Healthcare/NutritionMarket AsiaEnergy Solutions Formation of an ecosystem combining
265、 various businesses to improve quality of life through healthcare,healthy food and other benefits.Create value chains that expands into next-generation fuels and direct reduced ironMedium-term Management PlanThree Key Strategic InitiativesWe have established three Key Strategic Initiatives to build
266、on the Strategic Focus of Medium-term Management Plan 2023.We aim to provide real solutions to social issues on a workable timeline.Developing solutions for stable supply of resources,materials,food,etc.,essential for the development of society,and mobility,basic and digital infrastructure supportin
267、g industriesProviding value that enhances quality of life including healthcare and healthy foodWellness Ecosystem CreationBasic infrastructure and digital infrastructureFood and agriculture Food Fertilizer Crop protectionResources,materials Mineral and metal resources ChemicalsMachinery and mobility
268、 Automotives Construction and industrial machinery Power generation FPSO Gas distributionBuilding blocks for stable supply and problem solvingCombining functions and businesses like building blocks to provide solutions to various industry issuesSolutions for stable supplyDevelopment of mobility and
269、infrastructureVarious industries around the worldProcessed foodsTesting and diagnosisCropsFood servicesHospitals and clinicsNutritionPharmaceuticalsProteinFunctional ingredientsHealthcare staffingWellnessEcosystemCreationGlobalEnergyTransitionIndustrialBusinessSolutionsProviding real solutions throu
270、gh business,eyeing both stable energy supply and climate change actionGlobal Energy TransitionIndustrial Business SolutionsKey Strategic InitiativesMedium-term Management Plan 2026Strategic FocusMedium-term Management Plan 2023Significant environmental changes Emergence of geopolitical risks Changes
271、 in global supply chains Balance of stable energy supply and carbon neutrality Diversification of lifestyles and heightened health awarenessNext-generation fuels and energyBatteriesRecycling of battery raw materialsNatural gasCopperForest resourcesEmission creditsRenewable energy power generationBat
272、tery raw materials and materialsReduced ironMobilityInfrastructure and logisticsThermal power generationLNGCCS/CCUSGate 4 DataGate 3 Management FoundationGate 2 Growth StrategyGate 1 Mitsuis Value CreationPublication of the Integrated Report30Mitsui&Co.Integrated Report 2023Medium-term Management Pl
273、anQuantitative Targets Use stable cash flow to distribute dividends and use upside from the business environment or cash flow from asset recycling to fund share repurchases Approx.37%of Core Operating Cash Flow over the cumulative three-year period Annual dividend per share:150(minimum)Introduced pr
274、ogressive dividend policy(maintain or increase dividends for the three years FY March 2024 through FY March 2026)Shareholder Returns PolicyTotal Payout ratioDividend PolicyWe aim to generate stable cash flow of over 1 trillion yen from the fiscal year ending March 2026 onward by continuing to improv
275、e the quality of our business portfolio.Quantitative Targets for FY March 2026Core Operating Cash Flow1trillion920 billionProfitShareholder returns as%of Core Operating Cash FlowAround 37%*Shareholder ReturnsAverage for Period of Medium-term Management Plan 2026Over12%ROE*MTMP 2026 cumulative basis
276、Dividend per shareIntroduction of progressive dividend policyCash Flow Allocation(billion)Cash inCore Operating Cash Flow2,750.0Asset recycling870.0Cash outMaintaining business(Sustaining CAPEX)570.0Growth investmentsInvestment decision or policy confirmed1,170.0New investmentsManagement Allocation1
277、,130.0Shareholder returnsAdditional shareholder returnsShare repurchase70.0Dividends680.0Shareholder ReturnsAccelerate initiatives that generated results under Medium-term Management Plan 2023,aiming for the continuous enhancement of base profit*Adjusted profit:Profit adjusted for commodity prices,e
278、xchange rates(consolidated basis),and other assumptions for FY March 2026,and excluding one-time gains/lossesMedium-term Management Plan 2026Medium-term Management Plan 2023Medium-term Management Plan 2020Initiatives for Continuous Enhancement of Base Profit170 billion increase in base profitContinu
279、ous Enhancement of Base ProfitTrading Maintaining and advancing a stable supply base Diversification of procurement sources Back-up plans for supply chainsMTMP 2026 Strengthening competitiveness of each business and formation of business clusters Expanding each businessStrengthening Competitiveness
280、Execution of growth investments selected from the investment pipeline/Execution of bolt-on investmentsGrowth StrategyImprovement of Efficiency Turnaround Continuation of strategic asset replacement Turnaround and improvement of business efficiency Improvement of productivity through digital transfor
281、mationMTMP2023 Demonstrate stable supply function Increase in volume,etc.Upside due to business environment Lowering the break-even point Enhancement of marketing Strategic asset replacement Turnaround Promotion of digital transformation Automotive,healthcare,infrastructure,and agricultural chemical
282、s Typical examples Formation of business clusters in adjacent areasFY March 2020FY March2023FY March2026560750920+70+60GrowthinvestmentsTrading,strengtheningof existing businessesImprovement of efficiency,turnarounds+40(billion)Adjusted profit*()FY March 2021FY March 2022FY March 2023FY March 2024FY
283、 March 2025FY March 202685105140150Dividend per shareGate 4 DataGate 3 Management FoundationGate 2 Growth StrategyGate 1 Mitsuis Value CreationPublication of the Integrated Report31Mitsui&Co.Integrated Report 2023Medium-term Management PlanCase Studies of Cross-industry Expertise and StrengthsReduce
284、d ironGeneration of emission credits from forest resourcesBiodiesel and bioethanolAsset management expertise and track record;provision of commodity derivative functionsProviding a decarbonized steel value chain to manufacturing industriesCopper and battery raw materialsDemand creation Production an
285、d utilization of fuel cell and battery electric vehicles Methanol vessels Ammonia vesselsRenewable energy power generationNext-generation fuelsLNG and natural gas supplyManufacturing and sale of ammonia,hydrogen and methanolMineral&Metal ResourcesIron&Steel ProductsMachinery&InfrastructureInnovation
286、&Corporate DevelopmentLifestyleEnergyChemicalsEnergy Solutions Business UnitCross-industry Global Energy Transition InitiativesClean Ammonia Initiatives(Combining Energy and Chemicals)Mitsui established the Energy Solutions Business Unit in April 2020 to accelerate the formation and promotion of bus
287、inesses involving next-generation fuels,power,green mobility and infrastructure,hydrogen and ammonia,carbon management,and other areas.One of the functions of the Energy Solutions Business Unit is serving as a hub to promote collaboration with other business units,combining expertise,business experi
288、ence,and partners across industries to simultaneously pursue multiple projects that will bring about a decarbonized society.HIGHLIGHTClean Ammonia Project with CF IndustriesWe have a track record of over 50 years in ammonia trading and maintain the top share of imports(60%)to Japan.We have also inve
289、sted in the ammonia production business and accumulated experience and expertise in handling ammonia,a hazardous chemical,including logistics activities such as the operation of dedicated vessels and storage tanks.Our long track record in the ammonia business and the chemicals business in the US as
290、well as our marketing capabilities for customers in Japan and Asia through collaboration with the Energy Segment,have earned us positive recognition of CF Industries,the worlds largest ammonia producer.We are conducting joint research with CF Industries toward the goal of starting operation of a cle
291、an ammonia plant in 2027 and have begun discussions regarding the handling of clean ammonia that will be produced following upgrades to CF Industries existing plant facilities prior to that timing.Since the 1970s,we have played a leading role as the largest foreign participant in the Abu Dhabi LNG p
292、roject.Leveraging the relationship of trust that we have built with ADNOC,we have been participating in a joint clean ammonia production project since 2022.Our participation in this project utilizes the expertise we have gained through more than 50 years of experience in handling ammonia.We are stud
293、ying the possibility of commencing production in 2025.Clean Ammonia Project with Abu Dhabi National Oil Company(ADNOC)Track record of participation in E&P and LNG projects Partners with whom we have developed relationships of trust through many years of project management Track record of stable ener
294、gy supply to Japan and AsiaExpertise relating to natural gas and LNGExpertise relating to ammonia Track record in trading;top share of imports to Japan Track record of participation in ammonia production business Ammonia handling including operation of dedicated vessels and storage tanksCombination
295、of Key Strategic InitiativesIndustrial BusinessSolutionsGlobal EnergyTransitionCombination of cross-industry expertise and strengthsEnergyChemicalsGate 4 DataGate 3 Management FoundationGate 2 Growth StrategyGate 1 Mitsuis Value CreationPublication of the Integrated Report32Mitsui&Co.Integrated Repo
296、rt 2023To maximize our business results,we have been systematically deploying the business expertise we have cultivated through our operations in various countries and industries as intellectual capital.In order to accelerate operational practices that are unique to Mitsui,we have organized our inte
297、llectual capital into a general-purpose framework that encompasses case studies,experts/evangelists and other features.We have built this dynamic platform for management capital,which we call our“Value Creation Palette”(VCP),so that all employees can freely utilize it across industries and business
298、categories.Building a Platform for Maximum Utilization of Management Capital Value Creation Palette(VCP)Medium-term Management PlanCase Studies of Initiatives to Strengthen Group Management Capabilities For business expertise that has been passed down Integrated Report 2022 Page 96 first identify it
299、,then convert and compile it for sharing.Organize elements required for improving value into more than 100 items in 10 areas Maintain,match and codify intellectual capital through a dedicated organization,human resources and digital transformationImprove businessmanagementcapabilitiesReproducibility
300、 and horizontal rolloutFacilitate deployment of the Groups comprehensive strengthsCreation of a common language for comprehensive strengthsFully utilize human capitalReproduction of value creationacquired through businessesShareintellectual capitalheld by each divisionArchive intellectual capital th
301、rough business accumulationReinforce and evolveintellectual capital for project incubation and problem solvingUtilizeintellectual capitalValue CreationOutcomeValue Creation PaletteValue Creation PaletteProject incubation InvestmentBusiness management Problem-solving measures backed by experience Con
302、tribution to industry that only Mitsui can accomplish Unique business concept of interwoven combinationsBusiness FieldsBusiness FieldsMethod of approachExperts/EvangelistsCase studiesToolsDemonstrating comprehensive strengths:CO2 reduction initiative with Rio TintoOverviewSigned a comprehensive memo
303、randum with Rio Tinto for CO2 reduction,with 59 people in 8 business divisions participating in the project.Intellectual capital utilizationComprehensively studied the areas of Mitsuis business portfolio that contributed in order to propose solutions.Improving management at a single company:Operatio
304、nal efficiency improvement at Aim ServicesOverviewAfter taking an inventory of corporate operations and analyzing the business volume for each,we identified the potential for a nearly 20%improvement in efficiency and considered various measures.Intellectual capital utilizationIdentified issues and c
305、onsidered measures that are in line with business characteristics,based on cases of operational efficiency improvement in other industries within the Group.Promote value creation activities that utilize intellectual capital to reproducibly drive the“create,grow,extend”processConcept and Outline of V
306、alue Creation PaletteCase Studies of Intellectual Capital UtilizationWe are promoting Corporate Strategy(4)Strengthening of group management capabilities,as the basis for accelerating the improvement of productivity per employee by promoting the effective utilization of Mitsui Group assets such as d
307、igital and intellectual capital.Strengthening of Group Management Capabilities through Digital TechnologyEnhancement of corporate valueImprovement of productivityContinuous enhancement of base profitReallocating human resources to value-added operationsSystemsProcessesHuman resourcesProductivity imp
308、rovements that contribute to the continuous enhancement of base profitIn each business,there are routine tasks that can be automated and simplified through digital transformation and non-routine tasks that should be standardized.We will achieve greater efficiency through the optimization of systems,
309、processes,and allocation of human resources from a company-wide perspective.Initiatives combining the areas of systems,processes,and human resources are essential to resolving productivity challengesSystems:Inefficiencies due to system-to-system variation,etc.=Grand design of systems,planned system
310、implementation and renewalProcesses:Non-routine processes intended to meet the wide-ranging individual needs of partners and customers=Thorough optimization and standardization of processes,while retaining those that lead to competitive advantagesHuman resources:Vital need to improve digital transfo
311、rmation and IT literacy in workplaces=Policies to further strengthen measures to develop strategic capabilities related to comprehensive digital transformationPursuit of new value creationGiven the expanding scale of total assets and ongoing human resources constraints,we need to further enhance pro
312、ductivity.We will promote initiatives to improve productivity and shift the focus of work to more creative,value-added operations.Gate 4 DataGate 3 Management FoundationGate 2 Growth StrategyGate 1 Mitsuis Value CreationPublication of the Integrated Report33Mitsui&Co.Integrated Report 2023Portfolio
313、ManagementRecyclingPortfolio reviewsDeliberationUpgrading project qualityProject incubationPortfolio management is a cornerstone of our management approach.We will continue to improve the quality of our business portfolio by enhancing upstream processes for incubating projects and upgrading their qu
314、ality so as to select optimal opportunities,strengthening businesses in familiar areas and forming business clusters,as well as improving business portfolio reviews.Improving the Quality of Our Business PortfolioSelection of Investment ProjectsWe strive for selection of investment projects from a co
315、mpany-wide portfolio perspective through close collaboration between management,business units,and corporate functionsContinuing to improve the quality of our business portfolio through reviews of holding policies of all investment projects under way and reviews of progress in each businessFY March
316、2021FY March 2022FY March 2023Number of projects reviewed1,7761,7521,790Total value of projects reviewed(trillion)6.47.48.9Number of recycling measures implemented1About 100About 120About 130Number of listed stocks2 held130117105Cash inflow from asset recycling(billion)143.0257.0392.0Portfolio Revie
317、w and Status of Asset Recycling(Example)Core businessCore businessCore businessAdjacent businessAdjacent businessFamiliar areas of businessBusiness investment and business cluster formation around core businessesEnhancement of reviews through the introduction of ROIC management,starting from Medium-
318、term Management Plan 2023Portfolio reviews using four-quadrant analysis(vertical axis:growth potential;horizontal axis:profitability)ROIC(company-wide/segment/business unit/business area/etc.)analysis (past fiscal yearspresentfuture)Human capital allocation analysis (visualization of personnel distr
319、ibution in four quadrants)Analysis in the GHG emission area(visualization of GHG emissions in four quadrants)Select projects and upgrade their quality by thoroughly utilizing our expertiseEngage in discussions and decision-making from a company-wide perspectiveEncourage timely portfolio recycling Co
320、nsolidated internal rate of return(IRR)Investment and loan guaranteed rate of return Risk-return ratio Strategy,business scale,probability of the business plan,risks,contract terms,etc.Criteria based on Medium-term Management Plan 2026(1)Three Key Strategic Initiatives(2)Potential for business clust
321、er formation(3)Alignment with achieving deeper sustainability management Council on Investment Proposals:Projects exceeding 5 billion Corporate Management Committee:Projects exceeding 15 billion Board of Directors:Projects exceeding 60 billionQuantitative criteriaQualitative assessmentCommittee stru
322、cture Decide at project review meetings,etc.,whether to continue project,priority of projects,allocation of resources,etc.Discussion from company-wide perspective based on quantitative contribution,resources,GHG impact,etc.Valuation based on WACC and cost of equity Discussions on Key Strategic Initi
323、atives in business areas that span multiple business units Upgrading quality via the Financial Management and Advisory Division and the Investment Administrative Division Cooperation with legal,finance,and tax affairs departments Investment knowledge accumulated through the review of more than 2,500
324、 business cases per year Business expertise accumulated through portfolio management,trading,etc.Understanding of global opportunities and risksProfessional organizationBusiness expertiseRegional expertiseBusiness unitsPortfolio Management CommitteeCouncil on InvestmentProposals1.Including partial s
325、ale of shares,etc.2.Investment stocks held for purposes other than pure investmentExecute investments and divestitures,monitor progress,and manage cash flowsApprove and implement concrete measures for improving business quality and recycling assetsStart of fiscal yearMid-fiscal yearEnd of fiscal yea
326、rThroughout fiscal yearThroughout fiscal yearPresent ROIC and future actions for each business area based on the four-quadrants analysis for each Business UnitEvaluate results and issues to be addressed for each Business UnitMonitor progress of investment and recycling and manage cash flows(1)Profit
327、ability(2)Effective use of human resources(3)Strategic significance of projects(4)Room for business growth(5)Mitsuis contribution to value enhancement Confirmation of holding policy for all investment projects Verification of projects violating withdrawal alert criteria Confirmation of feasibility o
328、f withdrawal from assets for which an exit policy has been adopted Verification of the significance of holding listed sharesReview criteriaEvaluation from a company-wide perspective by executives in charge of multiple business units and promotion of cross-segment collaboration Targeted at investment
329、s and loans of over 5 billion Discussion on whether or not to promote from both a qualitative and a quantitative perspectiveGate 4 DataGate 3 Management FoundationGate 2 Growth StrategyGate 1 Mitsuis Value CreationPublication of the Integrated Report34Mitsui&Co.Integrated Report 2023Financial Strate
330、gyMitsui allocates capital based on its cash flow allocation framework.The purpose of this framework is to drive the implementation of our growth strategy while maintaining and strengthening our financial foundation through the balanced allocation of cash,provided by operating cash flow and asset re
331、cycling to sustaining CAPEX,growth investment and shareholder returns.For all of the indicators we focus on when considering our financial strategy,our policy is to maintain appropriate levels based on our cash flow allocation framework.Financial Strategy Focus IndicatorsNon-current assets Sharehold
332、er equity(right scale)420092002120222023Years ended March00246810(trillion)642(times)Non-current assets(left scale)Shareholder equity(left scale)When we look at the balance between our non-current assets,which are relatively high risk,and equity that ultimately must absorb the
333、effects of this risk,we see continued gradual improvement.The difference between non-current assets and equity is mainly funded through interest-bearing debt,and if this expands,it reduces overall financial stability.Non-Current Assets and Shareholder EquityRisk assets Shareholder equity(right scale)200020202120222023Years ended March002468(trillion)80406020(%)Risk assets(lef