COMPANY RESEARCH AND ANALYSIS REPORT

ITOCHU Enex Co., Ltd
8133
Tokyo Stock Exchange First Section

27-Jul.-2017
FISCO Ltd. Analyst

Hiroyuki Asakawa

FISCO Ltd.
http://www.fisco.co.jp

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

ITOCHU Enex Co., Ltd
8133 Tokyo Stock Exchange First Section

27-Jul.-2017
http://www.itcenex.com/english/ir/■ Index■Summary---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 01
1. Reaches medium-term business plan target by posting FY3/17 net profit of ¥10,000mn............................

01

2. Announces medium-term business plan, “Moving 2018: Connecting to the future”; focus on
creating a foothold for establishing a management base to take the company to the next stage ...............

01

3. Targeting net profit over ¥20,000mn on contribution from environmental business andAsian operations as well as energy businesses. ..........................................................................................

01■Result trends------------------------------------------------------------------------------------------------------------------------------------------------------------------ 02
1. Review of FY3/17 results.............................................................................................................................

02

2. Home-Life Division. . ............................... ......................................................................................................

04

3. Trends in the Power & Utility Division..... ......................................................................................................

05

4. Car-Life Division...........................................................................................................................................

07

5. Energy Innovation Division...........................................................................................................................

09■New medium-term business plan and growth strategy-------------------------------------------------------- 10
1. Outline of the new medium-term management plan. ...................................................................................

10

2. Basic initiatives in the medium-term business plan......................................................................................

12

3. Trends by business segment. . ......................................................................................................................

13■Business outlook-------------------------------------------------------------------------------------------------------------------------------------------------------- 17■Shareholder returns------------------------------------------------------------------------------------------------------------------------------------------------- 20

We encourage readers to review our complete legal statement on “Disclaimer” page.

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

ITOCHU Enex Co., Ltd
8133 Tokyo Stock Exchange First Section

27-Jul.-2017
http://www.itcenex.com/english/ir/██Summary
Unveils new medium-term business plan; laying the foundation for
the future targeting net profit of ¥20,000mn
Itochu Enex Co., Ltd. <8133> (hereafter, also “the Company”) is an energy trade company that is playing a pivotal
role in the energy field for the ITOCHU Corp. <8001> group. It has a broad business scope, though mainly sells
petroleum products and liquefied petroleum (LP; propane) gas to users ranging from industrial businesses to final
consumers.
1. Reaches medium-term business plan target by posting FY3/17 net profit of ¥10,000mn
The Company reported FY3/17 results with ¥1,028,939mn in sales (down 4.0% YoY), ¥19,678mn in profit fromoperating activities (up 20.1%), and ¥10,405mn in net profit attributable to the Company’s shareholders (hereinafter,
net profit; up 39.3%). The Company achieved considerable profit growth even amid sales decline. Profit fromoperating activities and net profit both reached record highs and the Company reached the targets set out in its
medium-term business plan. Profit from operating activities showed strong growth on strong electric power sales
volume growth and improvement in the LP gas inventory impact and net profit topped ¥10,000mn for the first time
due to improvement in revenues from equity-method subsidiaries.
2. Announces medium-term business plan, “Moving 2018: Connecting to the future”; focus on creating afoothold for establishing a management base to take the company to the next stage
The Company announced its new two-year medium-term business plan, “Moving 2018: Connecting to the future”.
The Company has designated the two-year period covered by the new plan as a time when it will create a footholdfor establishing a management base to enable the Company to reach net profit of over ¥20,000mn in the near future.
This management base consists of two parts, the revenue base and the organizational base and the Company
intends to strengthen both of these. Quantitative targets are for FY3/19 profit from operating activities of ¥18,500mn
and net profit of ¥10,800mn. While these targets are slightly higher than FY3/17 results, the gap is not very large
because the new medium-term business plan focuses less on earnings and more on the content and quality ofmeasures aimed at laying the foundation for the future.
3. Targeting net profit over ¥20,000mn on contribution from environmental business and Asian operations aswell as energy businesses
The Company’s long-term goal, beyond the targets set out in “Moving 2018”, is to transform itself into a Company
able to consistently generate annual net profit of over ¥20,000mn. In order to reach its medium- to long-term targets,it believes it must not only expand its existing energy businesses (oil, gas, and electric power), but also achieve
growth and earnings contribution its environmental businesses and overseas operations (in Asia). While the Company
began some initiatives aimed at achieving these goals in the previous medium-term business plan, “Moving 2016”,
we believe its efforts build a foundation for the future under “Moving 2018” bear close monitoring.

We encourage readers to review our complete legal statement on “Disclaimer” page.

01 20

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

ITOCHU Enex Co., Ltd

27-Jul.-2017

8133 Tokyo Stock Exchange First Section

http://www.itcenex.com/english/ir/

Summary

Key Points
Posted record-high profit from operating activities and net profit in FY3/17. Net profit topped ¥10,000mn for the
first time.
• Announced new medium-term business plan, “Moving 2018: Connecting to the future”. Next two years
designated as a period of laying the foundations for the next stage of the Company’s development.
• In FY3/18, we focus less on quantitative results and more on progress on measures to move the Company
forward.
•㻾㼑㼟㼡㼘㼠㼟㻌㼠㼞㼑㼚㼐㼟㻿㼍㼘㼑㼟㻌㻔㼘㼑㼒㼠㻕㻔¥㼙㼚㻕㻼㼞㼛㼒㼕㼠㻌㼒㼞㼛㼙㻌㼛㼜㼑㼞㼍㼠㼕㼚㼓㻌㼍㼏㼠㼕㼢㼕㼠㼕㼑㼟㻌㻔㼞㼕㼓㼔㼠㻕㻔¥㼙㼚㻕㻝㻥㻘㻢㻣㻤

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Source: Prepared by FISCO from the Company's financial results██Results trends
Record-high profit from operating activities and net profit in FY3/17.
Net profit topped ¥10,000mn for the first time.
1. Review of FY3/17 results
The Company reported FY3/17 results with ¥1,028,939mn in sales (down 4.0% YoY), ¥695,060mn in revenue (down
4.0%), ¥19,678mn in profit from operating activities (up 20.1%), ¥19,344mn in profit before tax (up 28.9%), and¥10,405mn in net profit (up 39.3%). The Company achieved considerable profit growth even amid sales decline
and profit was well above the Company's initial forecast.
Profit from operating activities and net profit both reached record highs and net profit topped ¥10,000mn for the
first time. FY3/17 was the final year covered by the previous medium-term business plan, “Moving 2016” and theCompany surpassed its targets for profit from operating activities and net profit set out in that plan.

We encourage readers to review our complete legal statement on “Disclaimer” page.

02 20

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

ITOCHU Enex Co., Ltd

27-Jul.-2017

8133 Tokyo Stock Exchange First Section

http://www.itcenex.com/english/ir/

Results trends

Review of FY3/17 results(¥mn)
FY3/17

FY3/16
Full year

Full year(forecast)

Full year

YoY

vs. forecast

1,071,629

1,060,000

1,028,939

-4.0%

-2.9%

Revenue

723,645-

695,060-4.0%-

Gross profit

89,562-93,604

4.5%-

SG&A expenses

73,226-

74,697

2.0%-

Profit from operating activities

16,38417,50019,678

20.1%

12.4%

Profit before tax

15,00417,00019,344

28.9%

13.8%

Net profit attributable to the Company’s shareholders

7,469

10,00010,405

39.3%

4.1%

Sales

Source: Prepared by FISCO from the Company's financial results

Sales and revenue both declined by 4.0% YoY on falling crude oil prices and a decline in sales volume resulting fromlower demand for fuel oil. However, profit from operating activities rose by 20.1% YoY on strong growth in electric
power sales volume, improvement in the LP gas inventory impact, and one-time gains on the sale of wind power
facilities (under the International Financial Reporting Standards (IFRS) used by the Company, gains from asset sales
are posted at the operating level). Net profit rose a sizable 39.3% YoY, topping the ¥10,000mn level on contribution
from higher earnings at equity-method subsidiaries owing to rising LP gas prices.
Below, we provide a detailed description of trends in each business segment.
Breakdown of FY3/17 results by business segment(¥mn)
FY3/17

FY3/16
Full year

Full year(forecast)

Full year

YoY

vs. forecast

Home-Life Division

95,126

94,70090,768

-4.6%

-4.2%

Power & Utility Division

43,49558,70065,654

50.9%

11.8%

Car-Life Division534,156

538,400

511,156

-4.3%

-5.1%

Energy Innovation Division

398,852

371,300

361,361

-9.4%

-2.7%

0

-

-

-

-

1,071,629

1,063,100

1,028,939

-4.0%

-3.2%

Other
Sales before adjustments--3,100---1,071,629

1,060,000

1,028,939

-4.0%

-2.9%

Home-Life Division

3,367

5,000

4,831

43.4%

-3.4%

Power & Utility Division

4,439

3,900

6,640

49.6%

70.3%

Car-Life Division

4,194

4,800

4,169

-0.6%

-13.1%

Energy Innovation Division

3,774

3,800

3,924

4.0%

3.3%

1

-

-

-

-

15,77517,50019,564

24.0%

11.8%

Adjustments
Total sales

Other
Sales before adjustments
Adjustments
Total profit from operating activities

609

-

114

-81.3%-

16,38417,50019,678

20.1%

12.4%

Source: Prepared by FISCO from the Company's financial results

We encourage readers to review our complete legal statement on “Disclaimer” page.

03 20

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

ITOCHU Enex Co., Ltd

27-Jul.-2017

8133 Tokyo Stock Exchange First Section

http://www.itcenex.com/english/ir/

Results trends

Profit rose sharply on rising LP gas import prices. Secured 32,000
small-volume electricity retail contracts.
2. Home-Life Division
The Home-Life Division reported an increase in profit on weaker sales in FY3/17 with ¥90,768mn in sales (down
4.6% YoY), ¥86,828mn in revenue (including inter-segment transactions; same below) (down 5.2%), ¥4,831mn in
profit from operating activities (up 43.4%), and ¥2,823mn in net profit attributable to the Company’s shareholders(up 258.4%).

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Source: Prepared by FISCO from the Company's financial resultsLP gas sales volume declined by 0.6% YoY to 597,000 kilotons as the number of retail sales contracts increased
by only roughly 1% YoY (increase of 3,000 contracts, total contracts: roughly 350,000). However, as LP gas importprices rose around the end of FY3/17, the LP gas inventory impact (value of inventory stored in customers’ tanks)
improved by approximately ¥1,500mn YoY, thereby boosting profit from operating activities considerably. YoY profit
from operating activities growth was mostly attributable to this inventory impact improvement.
In addition, as mentioned above, earnings at equity-method affiliates improved owing to higher LP gas import prices
and net profit in the Home-Life Division improved by approximately ¥2,000mn, which contributed greatly to the risein companywide net profit.

We encourage readers to review our complete legal statement on “Disclaimer” page.

04 20

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

ITOCHU Enex Co., Ltd
8133 Tokyo Stock Exchange First Section

27-Jul.-2017
http://www.itcenex.com/english/ir/

Results trends㻔㻐㻛㼠㼛㼚㻕

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㻺㼛㼢㼑㼙㼎㼑㼞
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January…
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Source: Prepared by FISCO from the Company's results briefing materials



Among the initiatives carried out by the Company in FY3/17, it secured 32,000 small-volume retail contracts (suchas ordinary households and small stores) for combination LP gas and electric power by end-FY3/17, surpassing
its target of 30,000 contracts. We understand that through the securing of these contracts, the Home-Life Division
receives a certain amount of income from the Power & Utility Division and the Home-Life Division has still not yetachieved profitability when viewed as an independent business.
Another initiative is the development of overseas LP gas businesses. In May 2016, the company acquired sharesin Philippines-based LP sales business company, Isla Petroleum & Gas Corporation and entered the gas businessin the Philippines. Starting in January 2017, the Company began increasing the number of local employees withexperience in the business and it is now strengthening its business selling LP sales to Japanese companies in thePhilippines. In September 2016, the company's joint venture with Itochu Industrial Gas Co., Ltd. established in
Karawang International Industrial City, Indonesia completed construction of an industrial gas facility. The Company
plans to expand the operations of this joint venture by expanding its lineup of materials used by Japanese companies
located in Indonesia.

Strong growth in retail electric power sales volume. Making
progress toward future goals by upgrading asset portfolio.
3. Trends in the Power & Utility Division
The Power & Utility Division reported both sales and profits expanded, with ¥65,654mn in sales (up 50.9% YoY),¥63,542mn in revenue (up 48.6%), ¥6,640mn in profit from operating activities (up 49.6%), and ¥3,407mn in net
profit (up 52.1%) in FY3/17.

We encourage readers to review our complete legal statement on “Disclaimer” page.

05 20

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

ITOCHU Enex Co., Ltd
8133 Tokyo Stock Exchange First Section

27-Jul.-2017
http://www.itcenex.com/english/ir/

Results trends㻾㼑㼟㼡㼘㼠㼟㻌㼠㼞㼑㼚㼐㼟㻌㼕㼚㻌㼠㼔㼑㻌㻼㼛㼣㼑㼞㻌㻒㻌㼁㼠㼕㼘㼕㼠㼥㻌㻰㼕㼢㼕㼟㼕㼛㼚㻔¥㼙㼚㻕㻿㼍㼘㼑㼟㻌㻔㼘㼑㼒㼠㻕㻼㼞㼛㼒㼕㼠㻌㼒㼞㼛㼙㻌㼛㼜㼑㼞㼍㼠㼕㼚㼓㻌㼍㼏㼠㼕㼢㼕㼠㼕㼑㼟㻌㻔㼞㼕㼓㼔㼠㻕㻣㻜㻘㻜㻜㻜

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Source: Prepared by FISCO from the Company's results briefing materialsIn the electric power business, sales volume rose a strong 97.4% YoY to 3,190GWh, resulting in sizable earnings
growth. This was nearly 50% higher than the FY3/17 target of 2,200GWh set out in Moving 2016, the previous
medium-term business plan.
Growth in electric power sales is attributable to steady growth in retail sales volume in both the low-voltage segment(small-volume customers such as ordinary households and smaller retailers) and the high-voltage segment (large-volume customers such as plants and offices). As mentioned above, the Company secured 32,000 small-volume retailcontracts, surpassing its target. In addition to the focus in the Home-Life Division on selling combined LP gas andelectric power packages, the launch of “car and electricity collaboration” as a joint effort with Nissan Osaka Sales
from the Car-Life Division contributed to earnings. We believe the number of contracts with large-volume customers
increased as PPSs (Power Producer and Suppliers), including the Company, become better able to offer stableelectric power supply.

We encourage readers to review our complete legal statement on “Disclaimer” page.

06 20

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

ITOCHU Enex Co., Ltd
8133 Tokyo Stock Exchange First Section

27-Jul.-2017
http://www.itcenex.com/english/ir/

Results trends㻱㼘㼑㼏㼠㼞㼕㼏㼕㼠㼥㻌㼟㼍㼘㼑㼟㻌㼢㼛㼘㼡㼙㼑

（㻳㼃ｈ）

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㻲㼅㻟㻛㻝㻡

㻜㻲㼅㻟㻛㻝㻢

㻲㼅㻟㻛㻝㻣

Source: Prepared by FISCO from the Company's results briefing materials



The Company also made progress on forward-looking initiatives amid a favorable operating environment. For
example, it sold off some of its wind power facilities in order to upgrade its business portfolio. The gains from thesesales were a major factor behind the sizable YoY profit growth achieved in FY3/17. The Company also establisheda renewable energy generation O&M (operation & maintenance) company to run its O&M business (outsourced
operation and maintenance of power generation facilities) as one step in its plan to improve its power generation
business.

Impact of lower gasoline sales volume offset by strong sales at
Nissan Osaka Sales Co., Ltd
4. Car-Life Division
The Car-Life Division reported ¥511,156mn in sales (down 4.3% YoY), ¥471,132mn in revenue (down 5.1%),¥4,169mn in profit from operating activities (down 0.5%), and ¥1,576mn in net profit attributable to the Company’s
shareholders (down 21.7%) in FY3/17.

We encourage readers to review our complete legal statement on “Disclaimer” page.

07 20

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

ITOCHU Enex Co., Ltd

27-Jul.-2017

8133 Tokyo Stock Exchange First Section

http://www.itcenex.com/english/ir/

Results trends㻾㼑㼟㼡㼘㼠㼟㻌㼠㼞㼑㼚㼐㼟㻌㼕㼚㻌㼠㼔㼑㻌㻯㼍㼞㻙㻸㼕㼒㼑㻌㻰㼕㼢㼕㼟㼕㼛㼚㻔¥㼙㼚㻕㻿㼍㼘㼑㼟㻌㻔㼘㼑㼒㼠㻕㻣㻜㻜㻘㻜㻜㻜

㻼㼞㼛㼒㼕㼠㻌㼒㼞㼛㼙㻌㼛㼜㼑㼞㼍㼠㼕㼚㼓㻌㼍㼏㼠㼕㼢㼕㼠㼕㼑㼟㻌㻔㼞㼕㼓㼔㼠㻕

㻔¥㼙㼚㻕

㻠㻘㻡㻝㻜

㻠㻘㻥㻜㻜
㻠㻘㻝㻥㻝

㻢㻜㻜㻘㻜㻜㻜

㻡㻜㻜㻘㻜㻜㻜

㻟㻘㻠㻥㻝

㻞㻘㻤㻜㻜
㻢㻟㻤㻘㻤㻠㻤

㻡㻣㻠㻘㻟㻞㻤

㻡㻟㻠㻘㻝㻡㻢

㻡㻝㻝㻘㻝㻡㻢

㻢㻝㻞㻘㻞㻡㻥

㻞㻜㻜㻘㻜㻜㻜

㻠㻘㻞㻜㻜

㻟㻘㻡㻜㻜
㻞㻘㻠㻞㻤

㻠㻜㻜㻘㻜㻜㻜
㻟㻜㻜㻘㻜㻜㻜

㻠㻘㻝㻢㻥

㻞㻘㻝㻜㻜
㻝㻘㻠㻜㻜

㻝㻜㻜㻘㻜㻜㻜㻣㻜㻜㻜㻜㻲㼅㻟㻛㻝㻟

㻲㼅㻟㻛㻝㻠

㻲㼅㻟㻛㻝㻡

㻲㼅㻟㻛㻝㻢

㻲㼅㻟㻛㻝㻣

Source: Prepared by FISCO from the Company's financial results



The Company also continued to restructure its CS (CS is an abbreviation for Car-Life Station, it refers to service
stations providing multiple services provided by the Company) business. The number of CS declined by 85 as theCompany shuttered less profitable stations, falling to 1,888 by end-FY3/17. Gasoline sales volume fell by 3.6% YoY
to 3,587,000 kiloliters owing to the reduction in the number of CS and an increase in the number of hybrid vehicles.
The Company’s earnings structure is such that profit margins on gasoline are fairly stable and declines in sales
volume therefore have a direct impact on profit.

㻳㼍㼟㼛㼘㼕㼚㼑㻌㼜㼞㼕㼏㼑㻌㼠㼞㼑㼚㼐㻌㻔㻶㼍㼚㼡㼍㼞㼥㻌㻞㻜㻝㻟㻌㼠㼛㻌㻹㼍㼞㼏㼔㻌㻞㻜㻝㻣㻕



㻔¥㻛㻸㻕

㻾㼑㼓㼡㼘㼍㼞㻌㼓㼍㼟㼛㼘㼕㼚㼑㻌㼣㼔㼛㼘㼑㼟㼍㼘㼑㻌㼜㼞㼕㼏㼑㻾㼑㼓㼡㼘㼍㼞㻌㼓㼍㼟㼛㼘㼕㼚㼑㻌㼞㼑㼠㼍㼕㼘㻌㼜㼞㼕㼏㼑

㻝㻤㻜
㻝㻣㻜
㻝㻢㻜
㻝㻡㻜

㻝㻟㻟㻚㻥

㻝㻠㻜
㻝㻟㻜

㻝㻝㻟㻚㻞

㻝㻞㻜

㻝㻝㻜
㻝㻜㻜
㻥㻜
㻶㼍㼚㻙㻝㻟
㻹㼍㼞㼏㼔
㻹㼍㼥
㻶㼡㼘㼥
㻿㼑㼜㼠㼑㼙㼎㼑㼞㻺㼛㼢㼑㼙㼎㼑㼞
㻶㼍㼚㻙㻝㻠
㻹㼍㼞㼏㼔
㻹㼍㼥
㻶㼡㼘㼥
㻿㼑㼜㼠㼑㼙㼎㼑㼞㻺㼛㼢㼑㼙㼎㼑㼞
㻶㼍㼚㻙㻝㻡
㻹㼍㼞㼏㼔
㻹㼍㼥
㻶㼡㼘㼥
㻿㼑㼜㼠㼑㼙㼎㼑㼞㻺㼛㼢㼑㼙㼎㼑㼞
㻶㼍㼚㻙㻝㻢
㻹㼍㼞㼏㼔
㻹㼍㼥
㻶㼡㼘㼥
㻿㼑㼜㼠㼑㼙㼎㼑㼞㻺㼛㼢㼑㼙㼎㼑㼞
㻶㼍㼚㻙㻝㻣
㻹㼍㼞㼏㼔㻤㻜

Source: Prepared by FISCO from the Company's financial results

We encourage readers to review our complete legal statement on “Disclaimer” page.

08 20

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

ITOCHU Enex Co., Ltd
8133 Tokyo Stock Exchange First Section

27-Jul.-2017
http://www.itcenex.com/english/ir/

Results trends

The purpose of the restructuring of the CS business is to increase income from automotive services other than fuelsales. In FY3/17, the Company established Car-Life Stadium, an integrated service brand that encompasses threedifferent car-related businesses - rental cars, auto purchasing, and auto sales. The Company is also in the car washbusiness. While we expect these auto businesses that are unrelated to fuel sales to gradually increase earnings, we
believe it will take some time for this to offset the decline in fuel sales.
The reason profit from operating activities held steady even under these conditions was strong sales at subsidiary
Nissan Osaka Sales, where sales increased by ¥5,000mn YoY to ¥101,100mn and profit from operating activities
doubled to ¥2,600mn. Contribution to net profit also doubled, rising to ¥800mn. Auto sales volume declined by
1,000 units for new cars to 30,000 units and by 2,000 units for used cars to 23,000. This was attributable to a
decline in sales of compact cars in 1H owing to the falsification incident at Mitsubishi Motors Corporation <7211>.
After that, the product mix improved on the newly released Serena and Note models, resulting in revenue growth.

Profit also increased on improvements in the asphalt business andthe AdBlue business as the company made steady progress on
portfolio management.
5. Energy Innovation Division
The Energy Innovation Division reported increase in profits on weaker sales with ¥361,361mn in sales (down 9.4%
YoY), ¥76,949mn in revenue (down 21.4%), ¥3,924mn in profit from operating activities (up 4.0%), and ¥2,644mn
in net profit attributable to the Company’s shareholders (up 5.2%) in FY3/17.

㻾㼑㼟㼡㼘㼠㼟㻌㼠㼞㼑㼚㼐㼟㻌㼕㼚㻌㼠㼔㼑㻌㻱㼚㼑㼞㼓㼥㻌㻵㼚㼚㼛㼢㼍㼠㼕㼛㼚㻌㻰㼕㼢㼕㼟㼕㼛㼚㻿㼍㼘㼑㼟㻌㻔㼘㼑㼒㼠㻕㻼㼞㼛㼒㼕㼠㻌㼒㼞㼛㼙㻌㼛㼜㼑㼞㼍㼠㼕㼚㼓㻌㼍㼏㼠㼕㼢㼕㼠㼕㼑㼟㻌㻔㼞㼕㼓㼔㼠㻕

㻔¥㼙㼚㻕

㻔¥㼙㼚㻕

㻤㻜㻜㻘㻜㻜㻜

㻟㻘㻣㻤㻣

㻟㻘㻣㻣㻠

㻟㻘㻥㻞㻠

㻣㻜㻜㻘㻜㻜㻜

㻟㻘㻡㻜㻜
㻞㻘㻢㻢㻠

㻢㻜㻜㻘㻜㻜㻜

㻟㻘㻜㻜㻜

㻞㻘㻞㻡㻝

㻡㻜㻜㻘㻜㻜㻜
㻠㻜㻜㻘㻜㻜㻜

㻠㻘㻜㻜㻜㻣㻡㻥㻘㻞㻣㻡

㻞㻘㻡㻜㻜
㻞㻘㻜㻜㻜

㻣㻟㻜㻘㻡㻜㻡

㻟㻜㻜㻘㻜㻜㻜

㻝㻘㻡㻜㻜㻡㻤㻠㻘㻜㻣㻤

㻞㻜㻜㻘㻜㻜㻜

㻝㻘㻜㻜㻜㻟㻥㻤㻘㻤㻡㻞
㻟㻢㻝㻘㻟㻢㻝

㻝㻜㻜㻘㻜㻜㻜㻡㻜㻜㻜㻜㻲㼅㻟㻛㻝㻟

㻲㼅㻟㻛㻝㻠

㻲㼅㻟㻛㻝㻡

㻲㼅㻟㻛㻝㻢

㻲㼅㻟㻛㻝㻣

Source: Prepared by FISCO from the Company's financial results

We encourage readers to review our complete legal statement on “Disclaimer” page.

09 20

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

ITOCHU Enex Co., Ltd
8133 Tokyo Stock Exchange First Section

27-Jul.-2017
http://www.itcenex.com/english/ir/

Results trends

Division sales declined by 9.4% YoY as sales of industrial fuel (heavy oil) declined 9.1% to 2,642,000 kilotons andoverseas sales of bunker fuel oil for ships declined sharply on sluggishness in the global marine transport industry. In
the run-up to the end of the fiscal year, the rise in crude oil prices impacted the Company's asphalt inventory value,
thereby improving profitability, and division profit from operating activities increased YoY. Sales of AdBlue (an NOx
decomposition solution additive for diesel engines) also rose by 14% YoY, contributing to earnings.
In the Energy Innovation Division, based on its slogan of “portfolio management”, the Company is finding ways
to appropriately and dynamically leverage business assets and moving forward with commercialization of new
businesses. In the AdBlue business, the Company created an integrated production and sales system utilizing 20
supply sites and 10 alliance plants nationwide, which contributed to the abovementioned doubling of sales volume.
The Company is also making progress toward the full-scale launch of new businesses such as the fly ash businessand recovered oil business. While the Company handles many products that are unfamiliar to most consumers, it
has strengths in each of these fields and has secured considerable profit through its constant efforts to improve its
earnings potential.

██New medium-term business plan andgrowth strategy

Announced new two-year medium-term business plan “Moving 2018”.
Next two years designated as time to lay foundation for the future.
1. Outline of the new medium-term management plan
The Company announced its new two-year (FY3/18 and FY3/19) medium-term business plan, “Moving 2018:
Connecting to the future”. The concept behind the new plan is “two years to lay the management foundations forthe next stage of the Company's development” as expressed by the subtitle of the Plan “Connecting to the future”.
During the two-year period ending with FY3/17, the Company worked toward the goals of its previous medium-termbusiness plan, “Moving 2016 – Sowing seeds for tomorrow”. As mentioned above, net profit topped ¥10,000mn
in FY3/17. While this is a significant milestone, it is not the Company's goal. In its next stage, the Company targets
annual net profit of ¥20,000mn.
However, as it is not possible for the Company to go from ¥10,000mn to ¥20,000mn in a single jump, it has made astrong statement by designating the period covered by “Moving 2018: Connecting to the future” as a time to focus
on creating a foothold to take the Company to the ¥20,000mn stage.

We encourage readers to review our complete legal statement on “Disclaimer” page.

10 20

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

ITOCHU Enex Co., Ltd

27-Jul.-2017

8133 Tokyo Stock Exchange First Section

http://www.itcenex.com/english/ir/

New medium-term business plan and growth strategy

Concept and positioning of new medium-term business plan

Source: The Company’s medium-term business plan briefing materials

Quantitative targets in the new medium-term business plan are for profit from operating activities of ¥18,500mn, net
profit of ¥10,800mn, and ROE of 9.1% in FY3/19, the final year of the plan. While the profit from operating activities
target is below the FY3/17 level, this is because, as mentioned above, FY3/17 profit from operating activities waslifted by one-off factors and the Company expects growth in profit from operating activities when adjusted forthese factors. Also, we believe the net profit target of ¥10,800mn is important in that it sends the message that theCompany will prioritize the establishment of net profit levels over ¥10,000mn.
We focus more on investment plans in the new medium-term business plan than on quantitative targets. The
Company plans to make ¥45,000mn in investments during the two years covered by the plan. On an annualizedbasis, this is roughly 70% higher than investments made in FY3/17. This is perhaps to be expected given that
the Company has designated the period covered by the plan as a time to lay the foundations for the next stage.
However, we believe it is important to note that operating cash flow over the two-year period is expected to reach¥46,000mn and that the Company is therefore positioned to make aggressive investments even as it maintains orstrengthens its financial position.
Quantitative targets in the medium-term business plan
FY3/17

Moving 2018
FY3/18

FY3/19Profit from operating activities¥19.7bn¥16.5bn¥18.5bn

Net profit attributable to the Company’s shareholders¥10.4bn¥10.4bn¥10.8bn

ROE

10.0%

9.3%

9.1%

Dividend payout ratio

Over 30%

Over 30%

Over 30%

Cash flows from operating activities¥17.8bn¥22.0bn¥24.0bn

Investment plan

¥13.4bn¥45.0bn (over 2 years)

Average rate
Crude oil price$50/bblCP price$400/MT

Forex rate

¥108.4/$

Source: The Company’s medium-term business plan briefing materials

We encourage readers to review our complete legal statement on “Disclaimer” page.

11 20

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

ITOCHU Enex Co., Ltd
8133 Tokyo Stock Exchange First Section

27-Jul.-2017
http://www.itcenex.com/english/ir/

New medium-term business plan and growth strategy

Two initiatives: reforming the revenue base and reforming theorganizational base
2. Basic initiatives in the medium-term business plan
The new medium-term business plan consists of two basic initiatives, reforming the revenue base and reforming
the organizational base. As these two initiatives will result in the reformation of the Company's management base,
we believe the Company will not be able to move to the next stage without strengthening both of these bases.
Basic initiatives of Moving 2018: two connections

Source: The Company’s medium-term business plan briefing materials(1) Reforming the revenue base
The Company plans to reform its revenue base in order to achieve future earnings growth. The new medium-termbusiness plan calls for “asset optimization”. This refers to the upgrading of assets in order to achieve profitability
and growth in both established businesses (oil and gas) and new businesses (electric power). We will provide
details below, but the Company has already begun this process, as evidenced by the selling off of a portion of
its wind power facilities in FY3/17.
In FY3/13, the Company’s established oil and gas businesses accounted for 65% of total assets and the newelectric power business and other businesses accounted for 35%. By FY3/19, the Company envisions a structure
wherein established businesses account for less than 50% of its assets and new businesses (electric power,
automobiles) and other businesses account for the majority of assets. By upgrading its assets, the Company aims
to improve its ratio of fixed assets to profit from operating activities from 6.2% to 7.0%. It also plans to optimize
assets within each individual business segment. As mentioned above, the selling off of a portion of the wind power
generation facilities in the electric power business is part of this initiative.

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12 20

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

ITOCHU Enex Co., Ltd
8133 Tokyo Stock Exchange First Section

27-Jul.-2017
http://www.itcenex.com/english/ir/

New medium-term business plan and growth strategy

Optimization of assets

Source: The Company’s medium-term business plan briefing materials(2) Reforming the organizational base
The Company aims to change its organizational structure from one where each product (oil, gas, electric power,etc.) is managed separately to a healthy, open-minded and strong corporate group organization. This is basedon the decision that the organizational system governing the group’s management must be reformed in order toimprove communication methods, risk management, and compliance systems.
One aspect of organizational reform is the strengthening of the skills of each and every employee by fostering
human resources capable of autonomously identifying problems, proposing solutions, and solving problems. This
will involve demanding higher quality of work from employees. The Company is also simultaneously transforming
its approach to work. Under the slogan “Enex Early Bird” the Company aims to transition to a style of work where
employees complete tasks in a relatively short amount of time.

Changing segment divisions and names in order to achieve more
effective business growth
3. Trends by business segment
In FY3/18, the Company redrew its segment divisions and renamed its business segments. Previously, the Car-Life
Division and the Energy Innovation Division were classified under the Distribution & Energy Innovation BusinessGroup, but the lines between these divisions have been redrawn based on their functional roles and some of theirnames have been changed. The Fleet (diesel truck fuel), AdBlue, and Industrial Fuels businesses have been moved
from the Energy Innovation Division to the Car-Life Division and the name of the Car-Life Division has been changed
to the Life & Logistics (LL) Division. Also, the name of the Energy Innovation Division was changed to the Industrial
Logistics (IL) Division.

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13 20

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

ITOCHU Enex Co., Ltd
8133 Tokyo Stock Exchange First Section

27-Jul.-2017
http://www.itcenex.com/english/ir/

New medium-term business plan and growth strategy

Changes to business divisions
Business group

Old segments

Main businesses

New segments

Petroleum products: stores wholesale
Car-Life Division

Petroleum products: CS retail
Autos: dealers, etc.

Industrial Logistics(IL) Group
Energy Innovation
DivisionLife & Logistics (LL)

Petroleum products: industrial fuels, fleet, AdBlue
Petroleum products: asphalt, bunker fuel, supply-demandtransactions, recovered oil, etc.

Industrial Logistics (IL)

Source: Prepared by FISCO from Company materials

Aims to increase number of direct LP gas customers and electric
power customers and establish new earnings model(1) Home-Life DivisionThis division has introduced a dual system (retail and wholesale) for its established businesses (LP gas, etc.)
and plans to clearly quantify the profitability of each business and improve the profitability of the less-profitablebusinesses. There are also plans to establish a development team within the division to strengthen its direct-salecustomer base.
The new electric power business, had secured 32,000 small-volume retail contracts as of end-FY3/17 and targets
70,000 contracts by end-FY3/18. This means it aims to secure 38,000 new customers in FY3/18. As part of theCompany's customer relationship management (CRM) efforts, it plans to put customer management information
in a database and leverage electric power business customers to develop new businesses.
Overseas business development, especially in Asia, has been identified as a key strategic initiative for the HomeLife Division. We believe the near-term goals will be to get the businesses in the Philippines and Indonesia up
and running. In Japan, the Company plans to offer integrated services tailored to the needs of each region andincrease customer satisfaction.
The Company forecasts Home-Life Division profit from operating activities of ¥4,500mn (down 6.9% YoY) in
FY3/18 and ¥5,000mn (up 11.1%) in FY3/19. The reason the Company forecasts profit from operating activities
decline in FY3/18 is that it expects a reactive decline from one-time gains posted in FY3/17 from the sale of assets.
Adjusted for this factor, the Company expects profit to increase on growth in the number of direct customers in
the LP gas business. In FY3/19, the Company expects a continued increase in profits on growth in the numberof direct customers. In addition to this, if the Company reaches its goal of securing 70,000 small-volume retailcontracts by end-FY3/18, we believe this could result in the electric power business entering the black on a fiscal
year basis.

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14 20

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

ITOCHU Enex Co., Ltd
8133 Tokyo Stock Exchange First Section

27-Jul.-2017
http://www.itcenex.com/english/ir/

New medium-term business plan and growth strategy

Turning to natural power sources and biomass to improve power
generation business(2) Power & Utility Division
The most important initiative in the Power & Utility Division is improving the power generation business. In response
to environmental regulations, the Company plans to strengthen its power generation capabilities based on natural
power sources. We believe the market will focus on the Company’s plans to finance capital investment throughthis project completion financing such as project financing and non-recourse loans. The Company may also
replace existing power generation facilities based on a long-term outlook. While the Company's power generation
capacity may decline temporarily, it is making progress with its O&M (operation & maintenance) business, partly
in order to address this issue, and it plans to maintain its managed power generation capacity at a stable level.
The Company is also considering using biomass as a power source and has begun considering how to selectand procure biomass fuel as well as how to create the necessary infrastructure. As this is a massive undertaking,
the Company may remain in the consideration and preparation stages during the two years covered by the new
medium-term business plan. However, we believe it is likely to move toward more concrete discussions regarding
the use of biomass as a base load power source with low environmental impact.
In the area of sales, in addition to cooperation between the Home-Life Division and the Life Energy & Logistics
Division, the Company plans to proactively make use of alliances with outside partners. The Company will continue
to strengthen sales to large-volume customers (mainly corporate customers such as plants and medium-sized
stores).
The Company forecasts Power & Utility Division profit from operating activities of ¥4,400mn (down 33.7% YoY) in
FY3/18 and ¥5,500mn (up 25.0%) in FY3/19. The reason the Company forecasts profit from operating activities
decline in FY3/18 is that it expects a reactive decline from one-time gains posted in FY3/17 from the sale ofassets. Adjusted for this factor, the Company expects profit from operating activities to rise by ¥500mn YoY. The
Company expects profit growth to accelerate in FY3/19 on an increase in electric power sales volume.

Aims to expand operations by leveraging local networks andbecome a life infrastructure company(3) Life Energy & Logistics Division
The most important initiative in the Life Energy & Logistics Division is organizational reform and merger of businesses within the division. The division has been split into four sections and has adopted sales strategies tailoredto each region. In addition to petroleum products, the Company aims to provide integrated services vital to local
societies.
In the CS business, the Company plans to continue to reduce assets by shuttering less-profitable CS and
thereby optimizing assets on a companywide level. However, the Company plans to cultivate automobile-related
businesses such as car rental, car purchasing, insurance, and maintenance under the Car-Life Stadium brandand use existing CS to provide services tailored to the needs of each region, thereby becoming an essential partof the local infrastructure.

We encourage readers to review our complete legal statement on “Disclaimer” page.

15 20

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

ITOCHU Enex Co., Ltd
8133 Tokyo Stock Exchange First Section

27-Jul.-2017
http://www.itcenex.com/english/ir/

New medium-term business plan and growth strategy

In the dealership business run by Nissan Osaka Sales, the Company aims to implement highly efficient management, cut costs, improve management quality, and enhance its ability to respond to changes in the operating
environment. It also plans to deepen recognition of the value of Nissan Osaka Sales’ customer base as the top
dealership in Osaka, and protect this advantageous position.
The Company forecasts Life Energy & Logistics Division profit from operating activities of ¥5,400mn (down 6.9%
YoY) in FY3/18 and ¥5,600mn (up 3.7%) in FY3/19. The reason the Company forecasts profit from operating
activities decline in FY3/18 is that it does not expect to be able to fully offset negative impacts from the pullbackin the CS business and declining gasoline sales volume with positive impacts from strong performance in the fleet
and AdBlue businesses and cost cuts. In FY3/19, the Company expects the weightings of these positive andnegative factors to reverse even as the business structure remains the same, resulting in profit growth.

Aims to reallocate division’s business portfolio by strengthening
established businesses and moving forward with new and strategic
projects.
(4) Industrial Energy & Logistics Division
Initiatives in the Industrial Energy & Logistics Division include improving profitability by optimizing the value chains(sales, logistics, and procurement) of established businesses. We believe another challenge facing the division
is restructuring the cost structure by pursuing opportunities in businesses related to or derived from establishedbusinesses and improving facilities management by focusing on the unique characteristics of the equipment
industry.
Possible new and strategic projects include launching a recycling business or participation in a bio-based jet fuelproject. We understand the Company has already made progress toward the launch of a recovered oil and fly
ash recycling business and is nearly ready to start operations as a profitable business. Regarding participation ina bio-based jet fuel project, the Company partnered with Euglena Co. Ltd. <2931> in a domestic biofuel project
which, in June 2017 received a third-party capital infusion and is now working toward starting operation of a
proof-of-concept plant in 2019.
The Company forecasts Industrial Energy & Logistics Division profit from operating activities of ¥2,100mn (down
4.5% YoY) in FY3/18 and ¥2,400mn (up 14.3%) in FY3/19. Despite an upturn in asphalt prices, the Company
expects division profit from operating activities to trend sideways or decline in FY3/18 on a decline in overall
volume. In FY3/19, the Company expects YoY profit growth on a recovery in asphalt demand ahead of the Tokyo
Olympic Games and a bottoming of bunker oil (ship fuel) prices.

We encourage readers to review our complete legal statement on “Disclaimer” page.

16 20

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

ITOCHU Enex Co., Ltd

27-Jul.-2017

8133 Tokyo Stock Exchange First Section

http://www.itcenex.com/english/ir/

New medium-term business plan and growth strategy

Forecast by segment(¥mn)
FY3/18

FY3/17Full year

Full year(forecast)

FY3/19Full year(forecast)

YoY

YoY

Home-Life Division

90,76899,4009.5%

107,300

7.9%

Power & Utility Division

65,65484,30028.4%

90,8007.7%Life Energy & Logistics Division740,400

763,100

3.1%

771,800

1.1%

Industrial Energy & Logistics Division

132,100

211,700

60.3%

194,600

-8.1%
0.5%

1,028,939

1,158,500

12.6%

1,164,500

Adjustment--8,500-0-Total sales

1,028,939

1,150,000

11.8%

1,164,500

1.3%Home-Life Division

4,831

4,500

-6.9%

5,000

11.1%

Power & Utility Division

6,640

4,400

-33.7%

5,500

25.0%

Life Energy & Logistics Division

5,800

5,400

-6.9%

5,600

3.7%

Industrial Energy & Logistics Division

2,200

2,100

-4.5%

2,400

14.3%

Profit from operating activities before adjustments

19,564

16,400-16.2%

18,500

12.8%

114

100

-12.3%--

19,67816,500-16.2%

18,500

12.1%

Sales before adjustments

Adjustment
Total profit from operating activities

Source: The Company’s financial results and medium-term business plan briefing materials██Business outlook
Focus more on progress toward future goals than on earnings levels
The Company forecasts ¥1,150,000mn in sales (up 11.8% YoY), ¥16,500mn in profit from operating activities (down
16.2%), ¥17,800mn in profit before tax (down 8.0%), and ¥10,400mn in net profit (down less than 0.1%) in FY3/18,
with sales rising, but profit declining. The Company issues guidance on a full-year basis and has not issued anearnings forecast for 2Q FY3/18.
Overview of the forecast for FY3/17(¥mn)
FY3/17Full year

FY3/18YoY

YoY

Full year(forecast)% change

Change1,028,939-4.0%

1,150,000

11.8%

121,061

Profit from operating activities

19,67820.1%

16,500-16.2%-3,178

Profit before tax

19,34428.9%

17,800-8.0%-1,544

Net profit attributable to the Company’s shareholders

10,405

39.3%

10,400

-0.0%

-5

Sales

Source: Prepared by FISCO from the Company's financial results

Segment earnings forecasts are as discussed above. As also mentioned above, the main reasons the Company
expects FY3/18 profit from operating activities to decline by 16.2% (¥3,178mn) YoY are that it expects a reactive
decline from one-time gains posted on asset sales in FY3/17 and a decline in fuel (gasoline, etc.) sales volume in
the Life Energy & Logistics Division.

We encourage readers to review our complete legal statement on “Disclaimer” page.

17 20

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

ITOCHU Enex Co., Ltd
8133 Tokyo Stock Exchange First Section

27-Jul.-2017
http://www.itcenex.com/english/ir/

Business outlook

Based on the Company's assumptions regarding crude oil and LP gas prices and actual levels, we believe it shouldbe able to reach its FY3/18 targets as long as there are no major changes in the operating environment. As theCompany has designated the period covered by the new medium-term business plan as a time to lay the foundation
for the future rather than chase after earnings growth, we see the Company’s forecast as realistic and achievable.
Our focus for FY3/18 is therefore not on earnings, but on whether steady progress is made on initiatives laying
the groundwork for medium- to long-term growth. While we have discussed important initiatives in each businesssegment above, we especially focus on 1) electric power customer contract numbers in the Home-Life Division, 2)
progress in the power generation business in the Power & Utility Division, 3) cultivation of the CS business (especially
growth in non-fuel oil businesses and progress in region-focused sales) in the Life Energy & Logistics Division, and
4) development of new businesses in in the Industrial Energy & Logistics Division.
Income statement(¥mn)
FY3/15

FY3/16

FY3/17

FY3/18

Sales

1,373,393

1,071,629

1,028,939

1,150,000

YoY

-8.8%

-22.0%

-4.0%

11.8%

Revenue

936,841

723,645

695,060

-

YoY

-3.0%

-22.8%-4.0%-

Gross profit

85,72089,56293,604

-

YoY

19.7%

4.5%

4.5%

-

% of sales

6.2%

8.4%

9.1%

-

SG&A expenses

71,18473,226

74,697

-

YoY

23.0%

2.9%

2.0%

-

% of sales

5.2%

6.8%

7.3%

-

-1,825

-593

-982

-

389

641

1,753

-

Total other expenses-72,620-73,178-73,926-

Profit from operating activities

13,10016,384

19,67816,500Loss from tangible assets, intangible assets and goodwill
Other - net

10.3%

25.1%

20.1%

-16.2%

12,15515,004

19,34417,800-12.2%

23.4%

28.9%

-8.0%

5,503

7,469

10,405

10,400

YoY-22.7%

35.7%

39.3%

-0.0%

EPS (¥)

48.71

66.10

92.09

92.05

22

24

32

32

862.30889.70960.37-

YoY
Profit before tax
YoY
Net profit attributable to the Company’s shareholders

Dividend (¥)
Book-value per share (¥)
Source: Prepared by FISCO from the Company's financial results

We encourage readers to review our complete legal statement on “Disclaimer” page.

18 20

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

ITOCHU Enex Co., Ltd
8133 Tokyo Stock Exchange First Section

27-Jul.-2017
http://www.itcenex.com/english/ir/

Business outlook

Balance sheet(¥mn)
FY3/14

FY3/15

FY3/16

FY3/17

188,193

157,708

137,865

178,127

Cash and cash equivalents

14,251

16,184

20,82422,727

Trade receivables

140,289

98,44971,96894,759Inventories

18,655

27,79425,16027,155

Non-current assets

132,531

171,351

166,188

166,476

Investments accounted for by the equity method

5,927

10,551

8,786

11,749Other investments

7,349

8,924

8,029

7,461

Property, plant and equipment

66,98888,83688,311

87,588Current assets

10,28023,47424,32923,638

Total assets

320,724

329,059

304,053

344,603

Current liabilities

143,751

Intangible assets

158,336

149,443

111,997

Short-term bonds and borrowings

11,49914,208

5,299

9,318

Trade payables

125,655

104,564

80,745

101,902

Non-current liabilities

73,37558,26866,66974,894Non-current bonds and borrowings

27,09926,74632,36631,702Equity94,651

97,432

100,526

108,511

Common stock

19,87819,87819,87819,878

Capital surplusc

18,737

18,74318,74018,740Retained earnings

59,88462,22366,02473,300

Other components of equity-2,098-1,661-2,364-1,655

Treasury stock-1,750-1,751-1,752-1,752

9,469

15,515

16,636

18,966

Total equity

104,120

112,947

117,162

127,477

Total liabilities and equity

320,724

329,059

304,053

344,603

Non-controlling interests

Source: Prepared by FISCO from the Company's financial results

Cash flow statement(¥mn)
FY3/14

FY3/15

FY3/16

FY3/17

Cash flows from operating activities

17,53034,33630,322

17,831

Cash flows from investing activities-12,556-20,410-16,673-14,712

Cash flows from financing activities-8,859-12,115-9,059-1,195

Net increase/decrease in cash and cash equivalents-3,885

1,811

4,590

1,924

Cash and cash equivalents at the beginning of the period

18,062

14,251

16,184

20,824

74

122

-27

-21

-

-

77

-

14,251

16,184

20,82422,727

Increase/decrease in cash and cash equivalents resulting from merger
Effect of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the end of the period
Source: Prepared by FISCO from the Company's financial results

We encourage readers to review our complete legal statement on “Disclaimer” page.

19 20

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

ITOCHU Enex Co., Ltd

27-Jul.-2017

8133 Tokyo Stock Exchange First Section

http://www.itcenex.com/english/ir/██Shareholder returns
Raised annual dividend distributions by ¥8 YoY to ¥32 per share toreflect profit growth in FY3/17
The Company utilizes dividends to compensate shareholders and has a basic policy on shareholder returns ofmaintaining a dividend payout ratio of 30%.
The Company’s initial FY3/17 dividend target, based on its forecast of ¥88.5 in earnings per share, was ¥27 pershare (dividend payout ratio of 30.5%). However, earnings per share surpassed the Company's target, coming in at¥92.09 per share (up 39.3% YoY) and the Company therefore hiked annual dividend distributions by ¥8 YoY to ¥32
per share (¥13.5 interim dividend and ¥18.5 year-end dividend), for a dividend payout ratio of 34.8%.
The Company plans to maintain FY3/18 dividends at ¥32 per share (¥16 interim dividend and ¥16 year-end dividend),
the same level as in FY3/17, based on a forecast of steady YoY earnings per share at ¥90.05. However, we focus on
the fact that the Company raised its interim dividend because we believe this may reflect management’s confidence
that it will reach its earnings targets. This puts the dividend payout ratio forecast at 34.8% and we believe it indicatesthat the Company is likely to keep annual dividend distributions at ¥32 per share even if net profit rises or falls slightly.

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Source: Prepared by FISCO from the Company's financial results

We encourage readers to review our complete legal statement on “Disclaimer” page.

20 20

Disclaimer
FISCO Ltd. (the terms “FISCO”, “we”, mean FISCO Ltd.) has legal agreements with theTokyo Stock Exchange, the Osaka Exchange,and Nikkei Inc. as to the usage of stock priceand index information. The trademark and value of the “JASDAQ INDEX” are the intellectual
properties of the Tokyo Stock Exchange, and therefore all rights to them belong to the Tokyo
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This report is based on information that we believe to be reliable, but we do not confirm or
guarantee its accuracy, timeliness,or completeness, or the value of the securities issued bycompanies cited in this report. Regardless of purpose,investors should decide how to use
this report and take full responsibility for such use. We shall not be liable for any result of its
use. We provide this report solely for the purpose of information, not to induce investment or
any other action.
This report was prepared at the request of its subject company using information provided
by the company in interviews, but the entire content of the report, including suppositions andconclusions, is the result of our analysis. The content of this report is based on informationthat was current at the time the report was produced, but this information and the content of
this report are subject to change without prior notice.
All intellectual property rights to this report, including copyrights to its text and data, areheld exclusively by FISCO. Any alteration or processing of the report or duplications of thereport, without the express written consent of FISCO, is strictly prohibited. Any transmission,
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The final selection of investments and determination of appropriate prices for investment
transactions are decisions for the recipients of this report.
FISCO Ltd.