Financial Strategy

Place importance on investment efficiency,
coordinating with the business strategies
to improve our corporate value

Meanwhile, in addition to active investments with a focus on
business creation and engineered materials, we will strive to
procure financing in accordance with our funding needs,
considering various factors including the overall financial
situation and interest rate levels. This is in line with our 22 Midterm Plan, which includes plans for making investments toimprove social, environmental, and economic value.

Cash flow (Billion yen)

Cash flow from operating activities
Cash flow from investing activities
Free cash flow
60.7 -25.5
58.0 -58.0
43.0 -31.6

Management that places awarenesson capital efficiency

KIBE Hisakazu
Representative Director Senior Managing Director,
Senior Managing Executive Officer,
Senior General Manager of Corporate Planning & Control Sector

Trends in consolidated equity ratio
Equity Ratio
Total assets (Billion yen)

40.1％

40.1％

Net assets (Billion yen)

637.9
595.1

631.9

644.0

37.6％

33.4％

199.0

239.7

253.4

256.4

In FY2022, the first year of the 22 Mid-term Plan, our Group’snet sales and profit substantially fell short of the targets. Thiswas principally attributable to rising raw materials prices andenergy costs and violently fluctuating exchange rates as an
outcome of the slowing Chinese economy and the protracted
Ukraine crisis.
In FY2023, the second year of the 22 Mid-term Plan, thebusiness environment is likely to remain severe and make it
difficult for us to achieve the initial targets. Nonetheless, wewill maintain the strategies described in the 22 Mid-term Planfor realizing the Vision for 2030, and adhere to the goal ofachieving an 80 billion yen ordinary income in FY2030. To thisend, we will have more in-depth discussions on management
resource allocation in order to reduce risks associated withfluctuations in metal prices and exchange rates and create
new growth products and businesses and move forward withinitiatives to increase the corporate value of the Group as awhole.
Towards realizing the Vision for 2030 established based on
our Purpose and launched under the 22 Mid-term Plan, we areadvancing the process to transform ourselves into a moresustainable corporate group, by implementing the integrated
thinking-based management principle on a full scale toincrease financial value and social and environmental value allat once.
Our major social and environmental initiatives arerepresented by the environmental investment promotion
system incorporating the Internal Carbon Pricing (ICP)
mechanism to reduce greenhouse gas emissions from theCompany’s energy consumption, which was rolled out in
FY2023. Going forward, we plan to utilize the ICP mechanism
to raise employee awareness of this issue and promotedecarbonization investments and climate change actions.
For the dynamic portfolio management mechanism adopted
to improve our financial value, we reviewed the portfolio matrix
in FY2022, and have found no need to significantly alter thebusiness portfolio for FY2023. We will continue to manage theportfolio, using and reviewing the mechanism, in order tofacilitate ongoing value enhancement.

Financing policy
2021

2022

Years ended March 3118

MITSUI KINZOKU Integrated Report 2023

2023

2024
（Forecast）

In order to prepare for drastic changes, such as in the market
situation as well as the exchange rate and prices for nonferrous
metals, we will secure a certain level of liquidity on hand so that wewill be able to conduct stable business operations.

Under the 19 Mid-term Plan, we strengthened businessmonitoring by evaluating each segment using ROIC
(consolidated return on invested capital).
Under the 22 Mid-term Plan, which adopts the dynamic
portfolio management mechanism, we use ROIC as abusiness value indicator to specify business units withhigher capital efficiency. Additionally, we are examining
plans to set appropriate ROIC targets for each business inaccordance with its position in the portfolio as a way toimprove the overall ROIC figure for the entire portfolio.
ROE (consolidated return on equity), a key financial
performance indicator for capital efficiency, in FY2022 was
3.5%, falling short of the target set for the initial year of the22 Mid-term Plan due to a decline in earnings. We have set
the target of achieving 14.0% in the final year, and willcontinue carrying out measures to meet the target.

36.1 -34.8

35.2
27.6 -16.3

11.3

11.4

1.3

2019

02020

2021

2022

23.8％
24.6％

3.9％

3.5％
0.9％

2019

2020

2021

2022

2023

Fiscal（Forecast）

Trends in consolidated dividend on equity (Yen)
140

140

110
3.3％
3.3％

8570

Tax policy
Mitsui Kinzoku Group complies with the laws and regulationsof the countries and regions in which we do business, andconduct our business activities in accordance with the tax
guidelines published by international organizations such as theOECD (the Organization for Economic Cooperation andDevelopment). If countries and regions have preferential
taxation systems, we carefully check the actual situation ofour business and the purpose of the systems, use themappropriately, and do not take tax avoidance acts that
abuse the systems. When making business decisions, weconsider tax matters and position tax strategy as part of ourbusiness strategy.

FiscalTrends in ROE

Dividend policy
Our dividend policy is based on the appropriate distributionof profits according to our business performance while also
ensuring that we hold back what is needed for the future ofour business foundation. In line with this, we aim to provide
continuous and stable shareholder returns, with abenchmark of 3.0% DOE (consolidated dividend on equity),
starting in FY2022.
Also, we will pay interim dividends, in principle, fromFY2023.
In the future, we will review our shareholder return policy inaccordance with the level of progress that we achieve instrengthening our management foundation and in improving
our financial condition.

2023（Forecast）

2.6％
DOE
2.5％

2019

2.5％

2020

2021

2022

2023

Fiscal（Forecast）＊ We executed a 1-for-10 consolidation of shares, which came into force onOctober 1, 2017.

MITSUI KINZOKU Integrated Report 2023

19Financial Highlights
Trends in major financial indexes and the planned values in the “22 Medium-term Plan”

Total asset turnover ratio

Sales growth rate
21.1%
20.0%・

13 Mid-term Plan: from FY2013 to FY2015, 16 Mid-term Plan: from FY2016 to FY2018,19 Mid-term Plan: from FY2019 to FY2021, 22 Mid-term Plan: from FY2022 to FY2024

19.0%

Net Sales

1.00
1.00・

10.5%

0.99

8,000・

0.88

2.9%

0.88

633.3
6,000・

Capex (Total for 3 fiscal years)(Billion yen)

1,500・

0.95
1.03

10.0%・(Billion yen)

652.0

645.0

117.0

114.3

522.9
1,000・0.90・

89.6

84.5

4,000・
0.0%・
500・

0.80・

△4.1%

-10.0%・

2,000・

△4.9%
0.70・

[Fiscal]

2017

2018

2019

2020

2021

2022

[Fiscal]

0・0・

2017

2018

2019

2020

2021

2022

[Fiscal]

2020

2021

2022

13 Mid-term 16 Mid-term 19 Mid-term 22 Mid-term

2023(Plan)

Rate of operating profit on sales

ROA (Return on assets)
9.8%

9.5%

Operating profit(Billion yen)

(Plan)

R&D expenditures (Total for 3 fiscal years)

60.7

9.6%

10.0%・

10.7%

9.1%

10.0%・

600・(Billion yen)

41.0

51.1

400・

31.6
300・

400・
5.0%・

3.4%

5.0%・

20.0

2.2%

0.0%・

2017

2018

2019

2020

2021

2022

12.5

[Fiscal]

0・0・

2017

20182019

2020

2021

2022

[Fiscal]

18.6

100・

1.8%

1.9%

0.0%・
[Fiscal]

200・

3.1%

2.8%
3.7%

200・

24.7

2020

2021

2022

2023

13 Mid-term 16 Mid-term 19 Mid-term 22 Mid-term(Plan)

Overseas sales ratio

51.1%

54.3%

1.11

44.2%

48.5%

45.0%

1.15

1.22

(Billion yen)

52.1

（Capex＋CVC）

44.8
1.09

1.0・

11.0

Investments in M&A400・0.82

Strategic investments in the 22 Mid-term Plan
Business Creation Sector

600・

1.5・

50.0%・

45.0%

Profit attributable to owners of parent

Net D/E ratio(Plan)

20.0

0.76

45.0%・

EngineeredMaterials
Sector

200・

8.5

78.0

10.0

(Billion yen)
40.0%・[Fiscal]0・0.5・

2017

2018

2019

2020

2021

2022

[Fiscal]

2017

2018

2019

2020

2021

2022

[Fiscal]

16.0

Other Businesses

2020

2021

2022

2023

10.5

(Plan)

Mobility Sector

11.0

Metals Sector

9.5Highlights of major financial indexes for the past 11 fiscal years are listed on pages 94-95. Please refer to those pages as well.

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MITSUI KINZOKU Integrated Report 2023

MITSUI KINZOKU Integrated Report 2023

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