Expansion on the move

Healthcare

Mitsui is expanding its health-

care businesses centered on

IHH, the largest private hospi-

tal group in Asia and Turkey,

which is expanding its busi-

ness in such ways as acquiring

a healthcare group in India.

Mitsui is developing medical

ancillary businesses by invest-

ing in MIMS Group, a drug

information company that

operates in 12 diff erent coun-

tries in Asia and Oceania (see

page 59), and also by agreeing

to invest in DaVita Care, a dialy-

sis clinics operator in Asia.

Feed additive

manufacturing

Novus is a major manufac-

turer of the feed additive

methionine (an essential

amino acid).

In order to respond to the

growing demand for food

around the world Mitsui plans

to expand the manufacturing

capacity for producing methi-

onine, whose market is

expected to continue to grow

at an annual rate of 5% over

the long term.

Total number disclosed

by IHH Healthcare Bhd.

Over 7,000 beds

in 2015

Close to

10,000 bedsin 2016

Production capacity

of methionine

320,000 tons

in 2015

440,000 tonsin 2020 (planned)

MITSUI & CO., LTD. ANNUAL REPORT 2016

IPP

Mitsuihasstakesinapower

generationbusinessthat

comprises70plantsin21

countriesaroundtheworld.

Byraisingprofitability

throughthecompletionof

projectsunderconstruction

andengaginginasset

replacement,Mitsuiisestab-

lishingasuperiorportfolio

diverseingeographicalloca-

tionandfuelmixinitsefforts

toachievesustainablegrowth

(seepage51).

Tank terminal

Inordertorespondtoincreas-

ingdemand,Mitsuiismoving

forwardwithconstructionto

expanditschemicaltankter-

minals,whichIntercontinental

TerminalsCompanyhasoper-

atedformanyyearsintheU.S.

portofHouston.Inaddition,

MitsuiisexpandingITCRubis,

locatedinEurope’smainport

ofAntwerp,Belgium(see

page64).

Bycapturingtherising

demandforbothchemical

andpetroleumproducts,

Mitsuiisaimingfortheexpan-

sionofastablebusinessthatis

lessaffectedbycommodity

marketconditions.

ITC/ITCRubis

totaltankcapacity

2.1millionm3

in2015

3.4 million m3

in2020(planned)

Equityshareofpower

generationcapacity

9.6GWin2015

11.1 GWin2016

MITSUI&CO.,LTD.ANNUALREPORT2016 01

Reinforcement on the move

LNG

Aspartofoureffortstocom-

prehensivelyreinforceourkey

strengthsinreserves,produc-

tionandcostcompetitive-

ness,wearestrengthening

ourdiverseLNGportfolioand

logisticalcapabilitiesona

globalscaleintheaimof

establishingourselvesasa

reliablesupplierofenergy

resourcestomeettheneeds

ofvariousconsumersaround

theworld.

Iron ore

Initsironorebusiness,Mitsui

hasbeenworkingwithits

partnersinAustraliaandBrazil

formanyyears.

Wecontinuetoexpand

productioncapacityandwork

toreinforceourcompetitive-

nessbasedonourcoreassets,

ineffortstocontributetoa

stablesupplyintheglobal

marketandtorespondtothe

globaldemandforironore,

whichisexpectedtoincrease

overthemediumtolong

term(seepage48).

MITSUI&CO.,LTD.ANNUALREPORT201602

Innovation on the move

Internet of Things

Mitsuihasnewlyinvestedin

OSIsoft,thegloballeaderin

IoTforindustrialcustomers.

OSIsofthasdevelopedthe

PISystem,whichisalready

usedby65%ofFortune500

companiesin125countries

aroundtheworld.TheMitsui

&Co.Groupwillleveragethe

PISystemtooptimizeitsbusi-

nessoperationsandestablish

newbusinessmodels(see

page61).

Fund for new pharmaceu-

tical development

Mitsuihasbeenexpandingthe

sizeofNovaQuest,aseriesof

privateequityfundsfocusedon

pharmaceuticaldevelopment,

bycollaboratingwithotherlarge

investors,includingQuintiles,a

majorproviderofoutsourced

pharmaceuticalservices.

Mitsuiwillengageinefforts

tofurthersupportNovaQuestto

providesolutionsinthedevel-

opmentofnewpharmaceutical

products,whichisexperiencing

rapidlyincreasingcosts.

High-speed

mobile data services

Mitsuihasinvestedin

Afrimax,ahigh-speedmobile

datacommunicationsopera-

torinSub-SaharanAfricathat

usesthefourth-generation

telecommunicationsstandard

Long-TermEvolution(LTE).

UsingtheVodafonebrand,

Afrimax’sbusinesspartner,

Mitsuiwillcontributeto

expandInternetusageinthe

region,wherethepenetration

ratecurrentlyremainsat

around7%.

Manufacturing carbon

fi ber light-weight tanks

Mitsuihasinvestedin

HexagonComposites,acom-

positetankmanufacturerthat

usescarbonfibertomanufac-

turepressuretanks.

Byexpandingthecompa-

ny’sbusinessintheglobal

market,Mitsuiwillhelp

reducegreenhousegasemis-

sionsinthetransportation

industrybypromotingtheuse

oflight-weightpartsand

materials(seepage55).

MITSUI&CO.,LTD.ANNUALREPORT2016 03

788.3

336.4

540.0

819.6

737.0

2015 2016 2017

(Forecast)

20142013

3,065

2,000

3,501

2,966

2015 2016 2017

（予想）

20142013

Financial

EBITDA* ¥billion (Yearsended/endingMarch31)

Profit(Loss)fortheYear

AttributabletoOwnersof

theParent ¥billion (Yearsended/endingMarch31)

NetCashProvidedbyOperatingActivities

NetCashUsedinInvestingActivities

FreeCashFlow ¥billion (YearsendedMarch31)

*EBITDA:Grossprofit+Selling,generalandadminis-

trativeexpenses+Dividendincome+Profit(loss)of

equitymethodinvestments+Depreciationand

amortizationmaynotmatchwiththetotalofitems

duetoroundingoff.

306.5

(83.4)

200.0

350.1

296.6

2015 2016 2017

(Forecast)

20142013

CoreOperatingCashFlow ¥billion (Yearsended/endingMarch31)

*CoreoperatingcashflowfortheyearendedMarch

31,2013isnotdisclosed.

471.7

360.0

661.6

608.9

2016 2017

(Forecast)

20152014

455.3

(754.5)

(299.2)

(210.6)

253.6

449.2

(659.8)

640.0

(386.4)

587.0

(408.1)

178.9

2013 2014 2015 2016

MITSUI & CO., LTD. ANNUAL REPORT 201604

Highlights (IFRS)

Profit(Loss)Attributableto

OwnersoftheParent

perShare ¥ (Yearsended/endingMarch31)

CashDividends ¥

DividendPayoutRatio % (Yearsended/endingMarch31)

TotalEquityAttributableto

OwnersoftheParent ¥trillion (AsofMarch31)

ROE % (Yearsended/endingMarch31)

7.7

5.8

9.79.4

2015 2016 2017

(Forecast)

20142013

NetInterest-bearingDebt ¥trillion

NetDER Times (AsofMarch31)

3.4

3.23.2

2.7

0.82

0.95

0.830.80

2015 201620142013

4.1

3.4

3.8

3.4

2015 201620142013

TotalAssets ¥trillion (AsofMarch31)

12.2

10.9

11.5

10.8

2015 201620142013

*Theconsolidateddividendpayoutratiofor2016

wasomittedduetoaloss.

171.0

(46.5)

111.6

192.2

162.5

2015 2016 2017

(Forecast)

20142013

64

37.4

64

50

44.8

59

30.7

43

26.5

2015 2016 2017

(Forecast)

20142013

MITSUI & CO., LTD. ANNUAL REPORT 2016 05

08 MessagefromtheCEO

14 ProgresstoDateoftheMedium-termManagementPlan

14 Medium-termManagementPlan—Challenge&Innovationfor2020

–DemonstratingMitsuiPremium–

15 MessagefromtheCFO

18 AchievementsinFiscalYearEndedMarch31,2016

inLinewiththeCurrentMedium-termManagementPlan

20 LifecycleManagementofInvestmentsandPracticing

DisciplinedPortfolioManagement

22 Mitsui’sValueCreation

22 Mitsui’sContinuingEvolutionbyMeetingtheChangingNeedsoftheTimes

24 Mitsui’sValueCreation

26 TheValueCreationProcess

32 StrategiesUnfoldingintheKeyStrategicDomains

34 GrowthofKeyStrategicDomainof“Mobility”

44 ReviewofOperations

44 ResultsbyOperatingSegment

46 Iron&SteelProductsSegment

48 Mineral&MetalResourcesSegment

50 Machinery&InfrastructureSegment

54 ChemicalsSegment

56 EnergySegment

58 LifestyleSegment

60 Innovation&CorporateDevelopmentSegment

63 AmericasSegment

64 EMEA(Europe,theMiddleEastandAfrica)Segment

65 AsiaPacificSegment

CONTENTS

MITSUI&CO.,LTD.ANNUALREPORT201606

66 CorporateGovernance

66 BoardofDirectorsandIndependentDirectors

68 Full-timeandIndependentAudit&SupervisoryBoardMembers

69 ManagingOfficers

70 SpecialDialogue:

InPursuitofCorporateGovernanceBefittingofMitsui

74 ConditionsofCorporateGovernance

82 InternalControls

85 OrganizationChart

86 MaterialityandOperations

86 TasksandAccomplishmentsbyEachKeyStrategicDomain

90 MajorInitiativestoMaterialIssues

92 10-YearFinancialData

94 CorporateInformation/InvestorInformation

ToOurStakeholders

Mitsuiupholdsthebasicideaofdevelopingandgrowingtogetherasamemberofsocietyand

creatingvalueforafuturewherepeople’saspirationscanbefulfilled.Thisideaactsasanindispensable

compassthatguidesusthroughsevereoperatingenvironments.Frombothfinancialandnon-financial

perspectives,thisintegratedreportintroducesandexplainsourresponsetotheissueswecurrently

face,theaccomplishmentswehavemadethroughourinitiativesthusfar,andthechallengeswewill

boldlytakeontowardsthefuture.Wehopethat,throughthisreport,ourstakeholderscangainabetter

senseofourunwaveringcommitmenttovaluecreation.

PleaserefertoourAnnualSecuritiesReportformoredetailedfinancialinformation,Sustainability

Report2016formoredetailedenvironmental,social,andgovernance(ESG)information,andother

Mitsuipublicationsforotherrelevantinformation.Allofthesedocumentscanbefoundonthe

Company’swebsite.

https://www.mitsui.com/jp/en/

GeneralManager,IRDivision

web

ACautionaryNoteonForward-LookingStatements

ThisAnnualReportcontainsstatements(includingfigures)regardingMitsui&Co.,Ltd.(“Mitsui,”“Mitsui&Co.,”“Company”)’scorporatestrategies,objectivesandviews

offuturedevelopmentsthatareforward-lookinginnatureandarenotsimplyreiterationsofhistoricalfacts.Thesestatementsarepresentedtoinformstakeholders

oftheviewsofMitsui’smanagementbutshouldnotbereliedonsolelyinmakinginvestmentandotherdecisions.Youshouldbeawarethatanumberofimportant

riskfactorscouldleadtooutcomesthatdiffermateriallyfromthosepresentedinsuchforward-lookingstatements.Theseinclude,butarenotlimitedto:(i)changes

ineconomicconditionsthatmayleadtounforeseendevelopmentsinmarketsforproductshandledbyMitsui,(ii)fluctuationsincurrencyexchangeratesthatmay

causeunexpecteddeteriorationinthevalueoftransactions,(iii)adversepoliticaldevelopmentsthatmaycreateunavoidabledelaysorpostponementoftransac-

tionsandprojects,(iv)changesinlaws,regulationsorpoliciesinanyofthecountrieswhereMitsuiconductsitsoperationsthatmayaffectMitsui’sabilitytofulfillits

commitments,and(v)significantchangesinthecompetitiveenvironment.Inthecourseofitsoperations,Mitsuiadoptsmeasurestocontroltheseandothertypes

ofrisks,butthisdoesnotconstituteaguaranteethatsuchmeasureswillbeeffective.

MITSUI & CO., LTD. ANNUAL REPORT 2016 07