Be the Best, Be the One 2014

Transcription

1 Be the Best, Be the One Results for the Sixmonth period ended d September November 4th, Sumitomo Corporation Topics 1. Six Months Results for FY 2. for FY 3. Dividend and Remuneration/Bonus to Executive Officers 4. Progress in BBBO 5. For the Next Mediumterm Management Plan Cautionary Statement Concerning Forward looking Statements This report includes forward looking statements relating to our future plans, forecasts, objectives, expectations and intentions. The forward looking statements reflect management's current assumptions and expectations of future events, and accordingly, they are inherently susceptible to uncertainties and changes in circumstances and are not guarantees of future performance. Actual results may differ materially, for a wide range of possible reasons, including general industry and market conditions and general international economic conditions. In light of the many risks and uncertainties, you are advised not to put undue reliance on these statements. The management forecasts included in this report are not projections, and do not represent management's current estimates of future performance. Rather, they represent forecasts that management strives to achieve through the successful implementation of the Company's business strategies. The Company may be unsuccessful in implementing its business strategies, and management may fail to achieve its forecasts. The Company is under no obligation and expressly disclaims any such obligation to update or alter its forward looking statements.

2 1. Six months Results for FY 2019 (Unit: billion yen) FY2013/1H Results FY/1H Results Increase/ Decrease Profit / Loss () for the Period Basic Profit (Mineral Resources) (15.1) (3.1) (12.0) (NonMineral Resources) (98.8) (112.6) (+13.8) Impairment losses of billion yen in the Tight Oil development Project in the U.S. and Certain Coalmining projects in Australia Mineral Resources : Weak due to sluggish market prices and costs in large project NonMineral Resources : Core businesses showed stable performance 2 2. for FY (Unit: billion yen) Profit / Loss () for the Year 1+2 FY (initial forecasts) FY (revised forecasts) FY/1H Results (Possible) Impairment Losses in Large Projects 1 () Profit /Loss() for the Year (excluding 1) We will recognize possible impairment losses in large projects : billion yen FY14/2H : Possibility of impairment losses in Iron ore project in Brazil and tire business in the U.S. in addition to projects which posted impairment losses in 2Q Mineral Resources : Severe business environment will continue due to sluggish market prices NonMineral Resources : Core businesses show stable performance Contribution of recent investments 3

3 3. Dividend and Remuneration/Bonus to Executive Officers FY Dividend Announced on FY2013 September 29 th Result Yearend : 25 yen/share (to be fixed) (24 yen/share ) Interim : 25 yen/share (25 yen/share) (23 yen /share) Annual : 50 yen/share (47 yen/share) Remuneration/Bonus to Executive Officers 4 4. Progress in BBBO (1) Results of Investment & Loan/Divestiture & Reduction (Unit: billion yen) FY2013 Results FY/1H Results BBBO (2year total, as of Oct. ) Plan for BBBO (2year total, as of May 2013) Investment & Loan (*) (*) Divestiture & Reduction (Cash Collection) (190.0) (50.0) FY/1H Results <Investment & Loan > Acquisition of Thermal coal mine interest in Australia Expansion of aluminum smelting project in Malaysia Offshore wind power generation business in Belgium etc. <Divestiture & Reduction> Sold part of interest of oil fields in the British North Sea etc. (*) Please see Appendix (page 27) for details of the investment & loan results 5

4 4. Progress in BBBO (2) Key Financial Indicators End of BBBO (billion yen) March 31, September 30, March 31,2015 ( as of Oct ) Total Assets 8, , ,800.0 Shareholders h equity 2, , , Shareholders equity ratio 27.7% 27.6% approx. 30% Interestbearing Liabilities (Net) 3, , ,470.0 DER(Net)(times) approx. 1.4 ROA 2.7% 0.1% Riskadjusted Return Ratio 10.9% 04% 0.4% Free Cash Flow Riskadjusted Assets (Core Risk Buffer*) 2,192.3 (2,265.4) total approx. 170 billion yen BBBO twoyear total approx ,2478 (2,267.6) * Core risk buffer = Common stock + Retained earnings + Foreign currency translation adjustments Treasury stock, at cost 2,400.0 (2,320.0) 6 5. For the Next Mediumterm Management Plan (1) Current Initiatives Special Committee on Managerial Reform Review corporate governance system and decisionmaking gprocesses to reinforce risk management structure Review the Strategy of our Mineral Resources Upstream Business New investment : Strategy is under review At the moment, we focus on increasing value of existing projects 7

5 5. For the Next Mediumterm Management Plan (2) Direction of Next Mediumterm Management Plan Promote managerial reforms Ongoing effort to strengthen th our earning power Strengthen our core businesses and consistent asset replacement Cash from these initiatives iti Rt Return to shareholders hld and reinvestment t Mineral Resources NonMineral Resources Historical Chart of Basic Profit (Unit: billion yen) Possible impairment loss of Iron Ore project in Brazil Basic Profit Total FY2012 FY2013 FY 当初計画 FY (revised forecasts as of Oct. ) FY (initial forecast as of May ) 8

6 <MEMO> Appendix Supplemental material for FY/1H Results Six months results for FY by segment for FY by segment Breakdown of (possible) Impairment Losses in Large Projects Financial position / Cash flows Assumptions Supplemental l materials by segment (Performance overview, Mediumto longterm strategies) What We Aim to Be in FY2019, our centennial year Mediumterm management plans Shareholders composition Historical Data 11

7 Six Months Results for FY Profit for the Period by Segment 2019 (Unit: billion yen) FY13/1H Results FY14/1H Results Metal Products FY14/1H Results (excluding impairment losses in large projects) Transportation & Construction ti Systems Environment & Infrastructure t Media, Network, Lifestyle Related Goods & Services 97.5 Mineral Resources, Energy, Chemical & Electronics Overseas Subsidiaries and Branches 12 for FY Profit for the Year by Segment (Unit: billion yen) Metal Products Initial Revised Revised (excluding impairment losses in large projects) Transportation & Construction ti Systems Environment & Infrastructure t Media, Network, Lifestyle Related Goods & Services Mineral Resources, Energy, Chemical & Electronics Overseas Subsidiaries and Branches 13

8 Breakdown of (possible) Impairment Losses in Large Projects (Unit: billion yen) Tight Oil Development Project in the U.S. Coal Mining Project in Australia FY/1H Results FY Possible Losses announced on Sept. 29 th approx approx Iron Ore Project in Brazil 50.0 Tire business in the U.S. 0 (TBC Corporation) 20.0 Tax effect etc Total (breakdown) Media, Network, Lifestyle Related Goods & Services Mineral Resources, Energy, Chemical & Electronics Overseas Subsidiaries i and Branches Corporate and Eliminations +9.9 approx approx approx approx Financial position/cash flows Financial Position Unit: Billions of yen Cash Flows Unit: Billions of yen As of As of Sep.30, Mar.31, Increase/ (decrease) Apr.1 Apr.1 Sep.30, Sep.30, 2013 Total assets 8, , Net cash provided by operating activities Net cash used in investing activities iti (274.4) 4) (139.4) Shareholders' equity 2, , Free Cash Flow (197.1) (89.3) Unrealized holding gains on securities availableforsale Foreign currency translation adjustments Shareholders' equity ratio % 27.7% (0.1pt) Net cash (used in)/provided by financing activities Effect of exchange rate changes on cash and cash equivalents Net (decrease)/increase in cash and cash equivalents (28.8) 8) (211.5) (49.5) Interestbearing t liabilities, net 3, , Debtequity ratio, net (times) pt 15

9 Assumptions Assumptions Foreign Exchange (YEN/US$) [Apr.Mar.] Initial Outlook (as of May, ) FY Results (Apr, Sep, ) Outlook (Oct, Mar, 2015) Sensitivity to profit *1 (as of Oct, ) around 1.3 billion yen (1JPY/US$) Interest rate LIBOR 6M (YEN) [Apr.Mar.] 0.20% 0.18% 0.20% LIBOR 6M (US$) [Apr.Mar.] 0.40% 0.33% 0.40% Crude oil<north Sea Brent> (US$/bbl) [Jan.Dec.] 106 Copper (US$/t) [Jan.Dec.] 6, ,914 Zinc (US$/t) [Apr.Mar.] 2,086 2,193 Iron ore (US$/t) [Jan.Dec.] *2 Coking coal (US$/t) [Apr.Mar.] *2 120 *1 Foreign Exchange: including hedge, Others: excluding hedge *2 Iron ore and Coking coal prices are general market price. All the figures are the average of the period written in the chart ,976 around 10 million yen (1US$/bbl) US$/bb) around 230 million yen (100US$/t) around 1.1 billion yen 2,151 (100US$/t) around 330 million yen (1US$/t) around 240 million yen (1US$/t) 16

10 Performance Overview We eliminated the Kansai Regional Business Unit and Chubu Regional Business Unit on 1 April,. These two regional business units were incorporated into organizations under business units and divisions. The prior year results are also shown on a new organization ation basis accordingly. 18 Metal Products Profit for the period (Apr.Sep. ): billion yen (3.6 billion yen increase from Apr.Sep. 2013) Steel sheets Steel service center: stable Tubular products North America: stable (Ref.) 2013 Original Apr.Sep. Apr.Sep. (unit: billions of yen) Gross profit Operating profit Share of profit of Investments accounted for using the equity method Profit/loss() for the year attributable to owners of the 12.6 parent Q:7.9 2Q: Basic Profit Mar, Total assets Investment & Replacement in FY14 Participated in the second phase of aluminum smelting project in Malaysia (Apr. ) Results of major subsidiaries and associated companies Company Equity in earnings of the segment (shares in equity owned by the segment / 2013 (Ref.) owned by whole company) Apr.Sep. Apr.Sep. Original SC Pipe Services: ERYNGIUM(30/100)* 1 : Business Outlook Tubular products in North America: stable Steel service center: stable Sumisho Metalex: Edgen Group(29/100): *1 As the consolidated period was changed, the results show equity in earnings of Jan.Jun for Apr.Sep and Apr.Sep. for Apr.Sep.. 19

11 Transportation & Construction Systems Profit for the period (Apr.Sep. ): billion yen (4.2 billion yen decrease from Apr.Sep. 2013) Ships, aerospace and railway car Shipping market : sluggish Automobile Auto finance businesses in Indonesia : decreased (Ref.) 2013 Original Apr.Sep. Apr.Sep. (unit: billions of yen) Gross profit Operating profit Share of profit of Investments accounted for using the equity method Profit/loss() for the year Construction equipment attributable to owners of the Distribution ib i business in Russia and China : slowdown parent 1Q:12.5 2Q:13.0 The U.S. : stable Basic Profit Mar, Total assets 1, ,513.1 Investment & Replacement in FY14 Invested in a construction equipment sales/service company in Saudi Arabia (July ) Business Outlook Automobile : weak due to worsening situations in some emerging countries such as the MiddleEast Lease and finance businesses : stable Results of major subsidiaries and associated companies Company Equity in earnings of the segment (shares in equity owned by the segment / 2013 (Ref.) owned by whole company) Apr.Sep. Apr.Sep. Original Sumitomo Mitsui Finance and Leasing (35/40): Sumitomo Mitsui Auto Service: SOF(90/100): Oto Multiartha(90/100): Sumisho Machinery Trade Corporation(60/100) * 1 : *1 Shares in equity of the segment were changed from 44.5% to 60% on 1 Apr.,. 20 Environment & Infrastructure Profit for the period (Apr.Sep. ): billion yen (1.7 billion yen increase from Apr.Sep. 2013) Overseas power infrastructure business: stable Investment & Replacement in FY14 Started construction of wind farm in the U.S. (Apr. ) Started construction of biomass power plant in Japan (Jun. ) Participated offshore wind power generation business in Belgium (Sept. ) Progress in expansion project of industrial park in Vietnam (Ref.) 2013 Original Apr.Sep. Apr.Sep. (unit: billions of yen) Gross profit Operating profit Share of profit of Investments accounted for using the equity method Profit/loss() for the year attributable to owners of the 7.0 parent Q:3.0 2Q: Basic Profit Mar, Total assets Results of major subsidiaries and associated companies Company Equity in earnings of the segment (shares in equity owned by the segment / 2013 (Ref.) owned by whole company) Apr.Sep. Apr.Sep. Original Progress in construction of solar and wind farm in Japan, wind farm in South Africa and industrial park in Myanmar Sumisho Global Logistics* 1 : Business Outlook Overseas power infrastructure business: stable and contribution from a new project in the 2 nd half Temporary gain through value realization in renewable energy power generation business in the 2 nd half Perennial Power Holdings(40/100) * 2 : *1 Shares in equity of the segment were changed from 95% to 100% on 1 Apr.,. *2 Shares in equity of the segment were changed from 50.01% to 40% on 1 Apr.,. 21

12 Media, Network, Lifestyle Related Goods & Services 22 1 Profit for the period (Apr.Sep. ):22.1 billion yen 2013 (4.7 billion yen increase from Apr.Sep. 2013) Major group companies J:COM and Jupiter Shop Channel etc. : stable Condominium : decrease in the number of delivery (Ref.) Original Apr.Sep. Apr.Sep. (unit: billions of yen) Gross profit Operating profit Share of profit of Investments accounted for using the equity method Investment & Replacement in FY14 Invested in sugar milling business in Thailand (Apr. ) Agreed to participate in telecommunications business in Myanmar (July ) Established private REIT (Aug. ) Business Outlook Major group companies such as J:COM and Jupiter Shop Channel etc. : stable Real estate business : stable Possibility of impairment loss in TBC Profit/loss() for the year attributable to owners of the parent Q:9.6 2Q: (including impairment loss 8.0)* Basic Profit Mar, Total assets 1, , *We announced impairment loss (expected) of tire business in the U.S. (TBC) on Sept. 29 th,. The effect to this segment is shown above as impairment loss. Results of major subsidiaries and associated companies Company Equity in earnings of the segment (shares in equity owned by the segment / 2013 (Ref.) owned by whole company) Apr.Sep. Apr.Sep. Original J:COM* 1 : Jupiter Shop Channel: SCSK: Banana business: Summit: Mobicom: S.C.Cement(98/100): Grain business in Australia(70/100)* 2,3 : Sumisho Brand Management(99.08/100): TBC(40/100): *1 The result for Apr.Sept was restated due to adjustments for consolidation according to JCN acquisition by J:COM in Dec., *2 Shares in equity of the segment in Apr.Sept. 2013: 35%. *3 As the consolidated period was changed, the results show equity in earnings of Mar.Aug for Apr.Sept and Apr.Sept. for Apr.Sept.. 22 Mineral Resources, Energy, Chemical & Electronics Profit for the period (Apr.Sep. ):97.5 billion yen (121.0 billion yen decrease from Apr.Sep. 2013) Tight oil development project in the U.S. : Posted impairment loss Coal mining business in Australia Posted impairment losses and expenses for interest acquisition Nickel business in Madagascar Increased in cost due to start of commercial production Iron ore businesses in South Africa and Brazil Decline in price Chemical & Electronics : stable Investment & Replacement in FY14 Participated in phenol production business in China (Apr. ) Acquired coal mining interest in Australia (May ) Sold part of oil fields interest in the North Sea (July ) Business Outlook Decline in commodity prices Nusa Tenggara Mining : Decrease in sales volume Tight oil development project in the U.S. and Coal mining projects in Australia : Impairment losses Iron ore mining project in Brazil : Possibility of impairment loss (Ref.) 2013 Original Apr.Sep. Apr.Sep. (unit: billions of yen) Gross profit Operating profit Share of profit of Investments accounted for using the equity method Profit/loss() for the year 97.5 attributable to owners of the 23.5 parent 1Q:3.3 2Q: (including impairment loss 120.3)* 38.0 (including impairment loss 179.7)* Basic Profit Mar, Total assets 1, ,611.5 *We announced impairment losses (expected) of tight oil development project in the U.S., coal mining projects in Australia and iron ore project in Brazil on Sept. 29 th,.the effect to this segment are shown above as impairment loss. Results of major subsidiaries and associated companies Company Equity in earnings of the segment (shares in equity owned by the segment / 2013 (Ref.) owned by whole company) Apr.Sep. Apr.Sep. Original Silver, zinc and lead business in Bolivia(93/100): Oresteel Investments(45/49): LNG Japan: SC Minerals America(84.75/100): Iron Ore Mining Business in Brazil: Sumitomo Shoji Chemicals: Oil fields interests in the North Sea: SMM Cerro Verde Netherlands: Sumitronics: SC Mineral Resources(70/100): Nusa Tenggara Mining: Nickel mining and refining business in Madagascar: Companies related to Coal business in Australia: Tight Oil Business in the U.S.(70/100):

13 Mineral Resources, Energy, Chemical & Electronics Mineral Resources Equity Share of Production and Sensitivity to Profit for the Year Coking coal Thermal coal FY13 FY14 Sensitivity to net income (annual base/ Annual 1Q Results 2Q Results excluding prices hedge) Results Equity share of shipping volume mil t Prices $/t mil (before tax) ($1/t) Equity share of shipping volume mil t *1 450 mil (before tax) Pi Prices $/t *2 82 ($1/t) Iron ore Manganese ore Copper Equity share of shipping volume mil t MUSA Prices $/t Equity share of shipping volume mil t Prices $/t Equity share of production Kt Batu Hijau Prices $/t 7,326 7,038 6,790 6, mil ($1/t) 30 mil ($1/t) 230 mil ($100/t) Note) Prices are general market price. FY14 forecasts and sensitivity to net income are as of May,. The shipping volume of Iron ore and manganese of Oresteel Investments are recognized semiannually (in second and fourth quarter). *1 The figure includes equity share of shipping volume of Clermont coal mine in Australia, which we acquired in FY. *2 Indexlinked price 24 Mineral Resources, Energy, Chemical & Electronics Mineral Resources Equity Share of Production and Sensitivity to Profit for the Year FY13 FY14 Sensitivity ty to net income Annual Results 1Q Results 2Q Results (annual base/ excluding prices hedge) Silver Equity share of production t(mil oz) 314(10.1) 1) 78(2.5) 93(3.0) 364(11.7) Prices $/oz mil ($1/oz) Zinc Equity share of production Kt bil Prices $/t 1,909 2,073 2,312 2,172 ($100/t) Lead Crude oil, gas Equity share of production Kt Prices $/t 2,093 2,096 2,183 2,121 Equity share of production mil bbl Prices $/bbl mil ($100/t) 10 mil ($1/bbl) LNG Equity share of production Kt Note) Prices are general market price. FY14 forecasts and sensitivity to net income are as of October,. 25

14 Overseas Subsidiaries and Branches *We announced impairment losses (expected) of tight oil development project in the U.S., coal mining projects in Australia, iron ore project in Brazil and tire business in the U.S. (TBC) on Sept. 29 th,.the effect to this segment are shown above as impairment loss Profit for the period (Apr.Sep. ):17.1 billion yen 2013 (38.5 billion yen decrease from Apr.Sep. 2013) Tight oil development project in the U.S. and Coal mining projects in Australia : Posted impairment losses Metal products related business : Stable 2013 (Ref.) Apr.Sep. Apr.Sep. Original Americas (including impairment loss45.0)* (including impairment loss58.2)* Europe, Middle East, Africa & CIS Asia & Oceania (including impairment loss2.1)* (including impairment loss4.0)* (Ref.) Original Apr.Sep. Apr.Sep. (unit: billions of yen) Gross profit Operating profit Share of profit of Investments accounted for using the equity method Profit/loss() for the year attributable to owners of the parent (including impairment loss 47.0)* 1Q:12.5 2Q: (including impairment loss 62.2)* Basic Profit Mar, Total assets 1, ,959.5 Results of major subsidiaries and associated companies Company Equity in earnings of the segment (shares in equity owned by the segment / 2013 (Ref.) owned by whole company) Apr.Sep. Apr.Sep. Original East Asia Investment & Replacement in FY14 Acquired office building in Chicago (Apr. ) Business Outlook Metal products related business: Stable Tight oil development project in the U.S. and coal mining projects in Australia : Impairment losses Tire business in the U.S. (TBC) and iron ore mining project in Brazil : Possibility of impairment losses ERYNGIUM(70/100)* 1 : Edgen Group(71/100): Silver, zinc and lead business in Bolivia (7/100): Perennial Power Holdings(60/100)* : Oresteel Investments(4/49): SC Minerals America(15.25/100): Iron Ore Mining Business in Brazil: TBC(60/100): Companies related to Coal business in Australia: Tight Oil Business in the U.S. (30/100): *1 As the consolidated period was changed, the results show equity in earnings of Jan.Jun for Apr.Sept and Apr.Sept. for Apr.Sept.. *2 Shares in equity of the segment were changed from 49.99% to 60% on 1 Apr., Results of Investment & Loan Plan for New Investment and Loan (2year total) FY2013 Results FY Results (billion yen) Amount Primary Fields Amount Amount Major investment & loan Metal Products 80.0 Tubular Products business Aluminum smelting plant project in Malaysia Transportation & Construction Systems Automotive business Aircraft engine leasing Auto financing business Environment & Power Infrastructure Wind farm business in the U.S. Offshore wind power generation business in Belgium Infrastructure business p Media, Network, Lifestyle Related Goods & Services Mineral Resources, Energy, Chemical & Electronics Strategic Focus Media business & Real estate business Upstream in Mineral resources and Energy business Acquisition of office property in Chicago Sugar manufacture & sales business in Thailand Additional investment in existing projects Total *The amounts include domestic and overseas segments. *We will allocate the budget of Strategic Focus to each segment. 27

15 Mediumto longterm Strategy by Segment 28 Mediumto longterm Strategy What We Aim to Be in FY2019, Our Centennial Year A Vision Based on Our Corporate Mission Statement We aim to be a corporate group that is recognized by society as meeting and exceeding the high expectations directed toward us, creating value that nobody else can match in ways benefitting our distinctive identity. We aim to build a solid earnings base and aim for an even higher level of profit growth while maintaining financial soundness. Total assets: 910 trillion Consolidated net income: 400 billion or more 29

16 Metal Products Strategies t for FY2019 Existing Earnings Pillars to enhance Future Earnings Pillars to develop Tubular products Expand value chain in oilfield related field based on OCTG business Expand to oilfield equipment, material and services Build distribution network for oil & gas transport pipelines and special pipes in addition to OCTG network Metal products for transportation Establish strong position in railway field(rail / wheel / axle) Aluminum smelting and rolling business Build value chain from upstream (smelting) to middle stream (rolling) Specialty steel Electrical steel sheet Gain 10% of global market share in automobile equipment field Steel service centers : enhance in strategic regions 30 Be the Best, Be the One Tubular products Expand oilfield services Focus on Fields Enhance distribution network for oil & gas transport pipelines and special pipes Steel sheets Deepen and enhance manufacturing business of railway wheels and axles in the U.S. Establish and strengthen steel service centers in strategic areas Manufacturing and selling secondary processing of specialty steel products in India Manufacturing and sales of motor core parts in Europe Nonferrous products Additional investment in aluminum smelting business in Malaysia Enhance aluminum rolling business and trading Major Initiatives in Focus on Fields Tubular products Establish distribution network for oil & gas transport pipelines and special pipes Acquired 100% shares of Edgen Group, a global distributor of metal and tubular products for energy industry (Nov. 2013, Amount of share acquisition: $520mil) > Strengthen middle downstream distribution network for pipelines and special pipes > Establish value chain from upstream to downstream combined with our strong OCTG business Steel sheets Manufacturing and sales of motor core parts in Europe Acquired 100% shares of Kienle+Spiess, German motor core manufacturing and sales company (Mar. 2013) Aim to be no.1 motor core manufacturer in the world Constructed transport vessel which enables a transport of the world longest 150meter rails Aim to increase overseas sales to meet the worldwide demand for long rails Nonferrous products Made additional investment in second aluminum smelting plant project by Press Metal in Malaysia (Apr. ) Aim to increase sales in Asia, where demand is growing 31

17 Transportation & Construction Systems Strategies t for FY2019 Existing Earnings Pillars to enhance Future Earnings Pillars to develop Leasing business Expand business base by utilizing Sumitomo Mitsui Finance & Leasing Company as major platform Shipping business Strengthen new building ship trade business Expand shipowning / joint owning business Aerospace Promote growth of aviationrelated business including aircraft leasing Automobile Expand auto leasing business to abroad and diversify finance businesses Expand sale and distribution mainly to growing market such as Africa, the Middle East and its neighbor countries Strengthen manufacturing mainly in emerging countries Construction ti equipment Strengthen and expand existing sales and service businesses Pursue business chances in emerging and resourcerich countries Expand globally rental construction equipment business based in developed countries Railways related business Implement existing EPC contracts successfully and secure new contracts Car manufacturing business in Mexico Produce new generation vehicles for the Americas and Europe in JV with Mazda Produce Toyotabrand vehicles 32 Be the Best, Be the One Focus on Fields Ships, aerospace and railway car Expand aircraft leasing and other leasing businesses Enhance quality and quantity in ship trading Replace and increase assets of shipowning / joint owning business Acquiring order of large EPC rail project Automobile Expand automotive leasing from Japan to mainly Asian emerging countries Diversify finance businesses in emerging countries Manufacturing automobile parts and automobiles Increase global parts production capacity of KIRIU etc. Start to expand production, increase car lines and fabricate engines in automobile assembly plant in Mexico Construction equipment Strengthen and diversify existing businesses and launch new distributor/service business in Asia and the Middle East Enhance rental business base in Japan and the U.S. Expand rental business to emerging markets Major Initiatives in Focus on Fields Ships, aerospace and railway car Expanding aircraft related leasing businesses Promoting SMBC Aviation Capital aircraft leasing as core business Number of leased aircraft including managed assets: 380(Sept. ) Signed 115 aircraft purchase contract with Airbus (delivery starts in 2016) Engine leasing Established JV with German major partner (Dec. 2013) Anticipate synergy with aircraft leasing business in accumulating prime assets Automobile Expanding overseas business of Sumitomo Mitsui Auto Service Promote auto leasing business in Asia in addition to Thailand, Australia and India Working based on quality over quantity policy for new loans in OTO(automobiles) and SOF(motorcycles) Enhancing production capacity of KIRIU Started operation of second factory in Thailand(July 2013) Started operation of third factory in Mexico (Aug. ) Started massproduction in automobile assembly plant in Mexico (Jan. ), and expanding production capacity stepbystep Construction equipment Expanding operation of Sunstate Equipment Company in the U.S. Expand sales in Saudi Arabia through ALJ Summit Company 33

18 Environment & Infrastructure Strategies t for FY2019 Existing Earnings Pillars to enhance Future Earnings Pillars to develop IPP / IWPP (overseas) Power generation capacity target for FY19: 10,000MW Power generation capacity as of Sept. : 5,478MW Water infrastructure Battery business Power generation from renewable energy (overseas) Power generation capacity target for FY19: 1,200MW Power generation capacity as of Sept. : 958MW Wind: 790MW Solar: 168MW Electricity business (Japan) Industrial park (overseas) 34 Be the Best, Be the One Focus on Fields IPP/IWPP (overseas) Enhance IPP/IWPP businesses in Asia, the Middle East and Americas Power generation from renewable energy (overseas) Develop new project using subsidies in each country Entry to offshore windgenerated electricity field Electricity business (Japan) New business of renewable energy generation leveraging FIT Expand retail business as the deregulation of the electric power industry moves forward Industrial park (overseas) Expand existing industrial park and improve functions Develop new projects in Asia Water Strengthen concession, desalination and treatment businesses Battery business Reuse lithiumion batteries collected from electric vehicles Charging facility service for electricpowered vehicles Major Initiatives in Focus on Fields IPP/IWPP (overseas) Started commercial operation of Shuweihat S3 gasfired combined cycle power plant in UAE Started to construct Az Zour North IPP/IWPP project in Kuwait (commercial operation in 2016) Participated oil/natural gas combined thermal power generation business in Ghana (commercial operation in 2017) Power generation from renewable energy (overseas) Constructing Desert Sunlight solar farm in the U.S. (completion of construction in ) Completed construction of Dorper wind farm in South Africa Participated in offshore wind power generation business in Belgium Constructing Mesquite wind farm in the U.S. Electricity business (Japan) Started to commercial operation of a solar farm and constructing another two solar farms (commercial operation in /2015) Constructing a wind farm (commercial operation in 2015) Constructing a biomass power plant (commercial operation in 2016) Industrial park (overseas) Expanding industrial parks in Vietnam Started construction of industrial park in Myanmar Water Constructing desalination plant in Oman (commercial operation in 2015) Agreed to sell part of shares in water supply and distribution company in U.K. Aim to increase corporate value through cooperation with strategic partner Battery business Started operation management service for operators of electricpowered vehicles charging facilities 35

19 Media, Network, Lifestyle Related Goods & Services Strategies t for FY2019 Existing Earnings Pillars to enhance Future Earnings Pillars to develop Further strengthen business base of core companies in media, ICT and retail field (J:COM / SCSK / SHOP etc.) Acquire upstream interests and strengthen business base and expand value chain from upstream to middlestream area in food business (four strategic fields: grain related / sugar / meat / fruit & vegetables) Expand successful business models in media, ICT and retail field from Japan to abroad Woody biomass fuel related business Overseas real estate, real estate fund including logistics facilities and private REIT related business Strengthen earnings base of timber resources and tire business Urban real estate business leveraging our integrated corporate strength 36 Be the Best, Be the One Focus on Fields Media, ICT and Retail J:COM Implement capital restructuring Establish joint management scheme with KDDI Complete JCN integration Promote businesses in emerging countries such as Asia Media / TV shopping / Ecommerce / Mobile / Drugstore Food Acquire upstream interests and strengthen business base Meat / Grain related etc. Materials and supplies Strengthen business base of timber resources in AsiaPacific basin Construction and real estate Promote development of real estate businesses in domestic strategic area Redevelopment plan of the Tokyo Denki University site Joint business in reconstruction of Kandanishikicho buildings Urban retail facilities and condominium sales etc. Major Initiatives in Focus on Fields Media, ICT and Retail J:COM Completed capital restructuring (end of Aug. 2013) Integrated services and brands (Jun. 2013) after JCN integration on 1 Apr. Participated in telecom business in Myanmar (fixed/mobile phones, internet business etc.) Start t joint operation (Sept. ) Started business in emerging countries TV shopping: Thailand Ecommerce: China, Indonesia, Vietnam, Malaysia Drugstore: Taiwan Food Enhancing business base Signed contracts on flour milling business in Vietnam, sugar production business in China and Thailand Established food wholesale company in Vietnam Made Australian grain company a subsidiary Materials and supplies Started fullfledged woodland operation in New Zealand Implementing measures based on TBC restructuring plan Construction and real estate Promoting development of real estate businesses in domestic strategic area Redevelopment plan of the Tokyo Denki University site / Ginza 6chome / Higashiikebukuro Condominium sales centered on CLASSY HOUSE Started logistics property business Established private REIT 37

20 Mineral Resources, Energy, Chemical & Electronics Strategies t for FY2019 Existing Earnings Pillars to enhance Enhance earnings base in upstream area of mineral resources & energy Valueup existing interests by strengthening earning power Enhance earnings base by promoting midlong term portfolio strategy Commodities Increase interests in four key strategic resources (copper / coal / iron ore / crude oil & gas) Time Create a best mix of exploration, development and production Region Disperse and mitigate country risk Form of participation Cooperate with prime partners and improve our function Future Earnings Pillars to develop Promote middle and down stream businesses leveraging synergy with upstream business Shale oil & gas related business in the U.S. (LNG & LPG export / Gas chemical etc.) Value chain from raw material of fertilizer to sales of product Establish stable supply by development and trading of rare earth Create new additional value through combining our functions Promote sales of pesticide and fertilizer globally and expand multifaceted support for crop production business to emerging countries Expand each value chain in chemicals from energy and minerals, electronics etc. The Strategies for FY2019 and Focus on Fields of mineral resources and energy for BBBO were as shown. However, we are reviewing the upstream investment strategy after we recognized losses in large projects such as the Tight Oil Development project in the U.S. 38 Be the Best, Be the One Focus on Fields Major Initiatives in Focus on Fields Upstream of mineral resources and energy Promote project under development Strengthen earning power of existing interests Strengthen earnings base by asset replacement Nickel (Madagascar) Sierra Gorda copper mine (Chile) Shale oil & gas (U.S.) Iron ore (Brazil) Copper (Americas) Coal (Australia) Silver, zinc & lead (Bolivia) Middle and down stream trading and investment Carbon related business Chemical from energy (Shale gas chemistry etc.) Chemical from minerals (Rare earth, soda ash, high purity quartz) Strengthen EMS* business base *Electronics Manufacturing Service Promote multifaceted support for crop production business globally Formulator of cosmetic ingredients Upstream of mineral resources and energy (Projects which posted impairment losses or have a possibility of impairment losses (announced Sept. 29, )) Tight Oil Development project (U.S.) Northern part : to divest, Southern part : continue to hold Iron Ore (Brazil) Focus on further reducing costs due to decline in price Coal (Australia) Working on amelioration of operating efficiency and promoting asset replacement to prime interest Acquired Clermont coal mining interest (Other businesses) Nickel (Madagascar) Rampup toward full scale operation Sierra Gorda copper mine (Chile) Focusing on achieving early full scale operation Shale gas (U.S.) Promoting development by optimizing drilling work efficiency Copper (Americas) Promoting expansion at Morenci and Cerro Verde as planned Silver, zinc & lead (Bolivia) Completed expansion plan of ore throughput capacity LNG export business in the U.S. Cove Point LNG project LNG export business in the U.S. Export 2.2 mil ton per annum of LNG to Japan for 20 years from

21 What We Aim to Be in FY2019, Our Centennial Year Aim to build a solid earnings base and aim for an even higher level of profit growth while maintaining financial soundness Profit for the Year (left scale) Total Assets (right scale) FY2019 Rough Projection Total Assets 910 trillion yen 11 Profit for the Year 400 billion yen or more Basic Policy Heading for What We Aim to Be 150 Pursue our strengths and capabilities of businesses and leverage our integrated 100 strengths 50 Effective use of finite corporate resources (billion yen ) FOCUS 10 f(x) Mediumto Longterm Strategy 2 (trillion yen) 40 Mediumterm Management Plans (billion yen) 300 Net Income (left scale) Total Assets (right scale) Riskadjusted Return ratio(2year ave.) (right scale/red) 250 (trillion yen) (%) FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY AA Plan AG Plan GG Plan FOCUS 10 f(x) BBBO Strategic investment in assets with potential profitability Strategic moves for further growth and development Pursuit of further improvement of quality heading for a new stage of growth A growth scenario on a new stage Growth across regional generational and organizational boundaries Heading for an even higher level of profit growth by thorough enhancement of our earning power 41

22 Shareholders Composition 40% 34.7% 34.9% 35% Overseas 30% 27.7% 25% Trust Banks 23.3% 20% 15% 12.1% 15.3% Financial Institutions (excl. Trust Banks) 16.8% 13.6% 10% 5% 10.2% Individuals and Others Other Corporations 11.4% 0% 2005/3 2006/3 2007/3 2008/3 2009/3 2010/3 2011/3 2012/3 2013/3 /3 /9 42

23 Historical Data(1) P/L, C/S AG Plan U.S.GAAP (Billion yen) FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 IFRS GG Plan FOCUS'10 f(x) BBBO FY six months ended Sept. 30 Gross profit Selling, general and administrative expenses (515.8) (609.9) (669.4) (654.4) (639.2) (660.7) (686.4) (657.1) (706.4) (358.4) Interest expense, net (20.0) (37.1) (42.8) (36.1) (24.1) (18.1) (15.1) (15.8) (17.4) (6.8) Dividends Share of profit of investments accounted for using the equity method Gain on securities and other investments, net Gain (loss) on property, plant and equipment, net (12.8) (7.5) (10.1) (15.1) 5.0 (17.6) (9.0) (5.8) (19.8) (190.7) Other, net 1.0 (1.8) (0.7) (1.6) 1.5 (2.2) (3.6) (1.6) 3.5 (0.7) Profit(loss) before tax (30.6) Income tax expense (80.7) (114.8) (119.8) (96.3) (61.8) (70.7) (77.7) (75.3) (70.4) (3.6) Profit(loss) for the year (34.3) Profit(loss) for the year attributable to: owners of the parent (38.4) Noncontrolling interests Total trading transactions 10, , , , , , , , , ,170.2 Basic profit Net cash from operating activities (60.8) Net cash used in investing activities (137.9) (449.7) (298.0) (261.5) (59.4) (469.4) (35.7) (186.2) (249.9) (274.4) Free cash flows (198.7) (255.5) (249.9) (197.1) Net cash from (used in) financing activities (5.8) (150.1) (33.3) (24.7) (28.8) 44 Historical Data(2) B/S, Key Financial Indicator U.S.GAAP IFRS AG Plan GG Plan FOCUS'10 f(x) BBBO FY (Billion yen) FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 six months ended Sept. 30 Total Assets 6, , , , , , , , , , Equity attributable to owners of the parent 1, , , , , , , , , ,428.1 Interestbearing liabilities (net) 2, , , , , , , , , ,410.9 Equity attributable t bl to owners of the parent ratio (%) ROE (%) ROA (%) DebtEquity Ratio (net) (times) (Yen) Stock price of Sumitomo Corp. (closing price) 1,676 2,120 1, ,075 1,189 1,196 1,178 1,313 1,210.5 (highest) 1,705 2,330 2,445 1,658 1,113 1,297 1,284 1,276 1,616 1,419.5 (lowest) 804 1,280 1, ,101 1,195.0 Nikkei stock average (closing price) 17, , , , , , , , , , Shares of common stock issued (unit: thousand) Earnings per share attributable to owners of the parent (basic) 1,250,603 1,250,603 1,250,603 1,250,603 1,250,603 1,250,603 1,250,603 1,250,603 1,250,603 1,250, (30.78) We have prepared consolidated financial statements in accordance with U.S. GAAP for FY2009 or earlier and International Financial Reporting Standards ( IFRSs ) for FY2010 or later. Under U.S. GAAP, Share of profit of investments accounted for using the equity method corresponds to Equity in earnings of associated companies, net, Profit for the year attributable to owners of the parent corresponds to Net income attributable to Sumitomo Corporation, Equity attributable to owners of the parent corresponds to Sumitomo Corporation shareholders equity and Equity attributable to owners of the parent ratio corresponds to Sumitomo Corporation shareholders equity ratio. 45