Mitsubishi Corporation (hereinafter “MC”) has established its new management strategy during the three years beginning with fiscal year 2016.
“Midterm Corporate Strategy 2018 – “Evolving Our Business Model from Investing to Managing” sets forth MC’s corporate vision and management approach over the next three years, both of which are designed to generate sustainable business value. The strategy takes into account various environmental factors that are expected to have an impact on MC’s operations, including a world economic slowdown, changes in commodity markets, geopolitical risks, a long-term stagnation in resource prices and changes caused by technological innovations such as AI and the IoT (the so-called “Fourth Industrial Revolution”) .
MC shall leverage its ingenuity to create new business models and generate value for societies, thereby developing the highest level of management expertise.
MC shall provide more opportunities for employees to develop into future leaders, instilling them with a strong sense of ethics, the foresight to anticipate and adapt to change, and the execution skills to overcome challenges in any business environment or era. More opportunities for employees to innovate new businesses will further enhance MC’s businesses, creating a virtuous cycle of professional and corporate growth.
2．Management Approach Over the Next Three Years
Rebalancing of “Resources” and “Non-resources”
In Resources, MC shall focus its investments in metallurgical coal, copper, and natural gas, optimizing the quality of its portfolios while maintaining their overall sizes.
In Non-resources, MC shall re-profile its portfolios but increase their sizes by investing in growing businesses where the company can proactively demonstrate its strengths.
Over the strategy’s three-year period, MC shall manage its investments and shareholders returns within its capacity to generate cash.
Further Evolution from “Investing” to “Managing”
Until now, MC has generated growth primarily by investing in businesses; however, the new strategy shall focus more on proactively managing the businesses, enabling our management partners to benefit from MC’s unique strengths and functions, and generating continuous value together.
Accelerated “Lifecycle-based” Portfolio Re-profiling
Recognizing that businesses have lifecycles influenced by environmental and other factors, MC shall re-profile its portfolios by proactively demonstrating the company’s strengths.
3．Financial Targets & Shareholder Returns
By effectively combining asset growth and portfolio re-profiling, MC shall aim for double-digit ROE by fiscal year circa 2020.
MC shall introduce a flexible and progressive dividend policy in line with its sustainable earnings growth over the next three years.