FYE 2022 1st Half Business Results Summary

FYE 2022 1st Half

Business Results Summary

November 5, 2021

Forward-Looking Statements

Data and projections contained in these materials are based on the information available at the time of publication, and various factors may cause the actual results to differ materially from those presented in such forward-looking statements. ITOCHU Corporation, therefore, wishes to caution that readers should not place undue reliance on forward-looking statements, and further, that ITOCHU Corporation has no obligation to update any forward-looking

statements as a result of new information, future events or other developments.	1

Summary of Financial Results for FYE 2022 1st Half

（Unit : billion yen）

• "Net profit attributable to ITOCHU" was ¥500.6 bil., increased by 98%, or ¥248.1 bil., compared to the same period of the previous fiscal year. It significantly exceeded the FYE 2020 1st half, which had been the best as a half year results, and renewed the highest record.
• "Core profit" was approximately ¥378.5 bil., increased by ¥175.5 bil., compared to the same period of the previous fiscal year, and all segments achieved increase. It renewed the highest record as a half year results. The core profit for the Q2 (approx. ¥198.5 bil.) exceeded this Q1 (approx. ¥180.0 bil.), which had been
  the best in every single quarterʼs and renewed all-time high resulting from the well-balanced growth both in non-resource and resource sectors.
• "Ratio of group companies reporting profits" was 86.3%, recovering to the same level as the FYE 2020 1st half which is the best as a 1st half results.
• "Core operating cash flows" was ¥400.0 bil., renewed all-time high as a half year results.
• ITOCHU revised upward its annual forecast to ¥750.0 bil. and annual dividend forecast to ¥110 per share, an increase of ¥22 from FYE 2021 (an increase of ¥16 from the previous forecast).

Net profit attributable to

ITOCHU

Extraordinary gains and losses

Core profit(*)

[Core profit(excluding the impact of COVID-19)](*)

(*)Core profit is shown in round figure.

Ratio (%) of group companies reporting profits

Core operating cash flows

FYE 2020

FYE 2021

FYE 2022

Increase/

FYE 2022 Forecast

Q1-2 Results

Q1-2 Results

Q1-2 Results

Decrease

Previous Forecast

Revised Forecast

Progress

(Disclosed on May 10)

289.1

252.5

＊ 500.6

+

248.1

550.0

*

750.0

67%

34.5

49.5

122.0

+

72.5

50.0

124.0

254.5

203.0

＊ 378.5

+

175.5

500.0

*

626.0

60%

[254.5]

[243.0]

[404.5]

[+

161.5]

Dividend

Previous

Revised

information

Forecast

Forecast

87.2%

76.5%

86.3%

Increased 9.8pt

(per share)

(Di sclosed on May 10)

Annual

94 yen

*

110 yen

(Planned)

(minimum)

(minimum)

325.0

266.0

＊ 400.0

+

134.0

Interim

47 yen

*

47 yen

：Record High as	*	：Record High	2
* aa half year results

Net profit attributable to ITOCHU by Segment/1st Half Results

（Unit : billion yen）

		FYE 2021	FYE 2022
	Q1-2 Results	Q1-2 Results
			500.6
500			10.0
450			45.5
400
			135.2
350
300		252.5	29.9
		31.6
250		8.4
		16.7	72.5
200		47.8
150		23.5
	23.8	66.7
		18.1
100		37.1	50.5
		30.0
50
		58.7
Non- 0		47.2
	201.2	*375.1
Resource
Resource		46.2	*130.5
Others		5.1	(5.0)
Non-	(*)	81%	74%
Resource(%)
	:Record High as
			* aa half year results

Summary of Changes from the Same Period of the Previous Fiscal Year

Textile [Inc / (Dec)︓¥ 1.7 bil.]

Increased due to the continuous expense reduction in apparel-related companies, the improvement of equity in earnings, and the gain on the sale of fixed assets, while the impact of COVID-19 remains to some extent with prolonged self-restraint.

Machinery [Inc / (Dec)︓¥ 28.9 bil.]

Increased due to the favorable sales in YANASE, the recovery in overall automobile-related business resulting from the alleviation of the impact of COVID-19, the recovery of the shipping market, the favorable performance in North American IPP-related business, and the gain on the sale of a water utility company in

IEI (European water-and-environment-related company).

Metals & Minerals [Inc / (Dec)︓¥ 87.5 bil.]

Increased due to higher iron ore prices, higher equity in earnings in Marubeni-Itochu Steel,

and the realization of foreign exchange gains due to the de-consolidation of ITOCHU Coal Americas.

Energy & Chemicals [Inc / (Dec)︓¥ 6.4 bil.]

Increased due to the improvement in profitability in CIECO Azer and higher dividends resulting from higher oil prices, and the stable performance in chemical-related companies, partially offset by the absence of the favorable performance in energy trading transactions in the same period of the previous fiscal year.

Food [Inc / (Dec)︓¥ 7.8 bil.]

Increased due to the improvement in North American grain-related companies, higher transaction volume in NIPPON ACCESS, the improvement in profitability of packaged foods business in Dole,

and the stable performance in fresh-food-related and food-distribution-related transactions.

General Products & Realty [Inc / (Dec)︓¥ 54.4 bil.]

Increased due to the favorable performance in North American construction materials business,

the improvement in ETEL (European tire-related company) resulting from the alleviation of the impact of COVID-19, higher equity in earnings in IFL (European pulp-related company) due to higher pulp prices, and the gain on the sale of Japan Brazil Paper & Pulp Resources Development.

ICT & Financial Business [Inc / (Dec)︓¥ 29.6 bil.]

Increased due to the stable performance in ITOCHU Techno-Solutions, the higher gain on fund operation, and the gain due to the de-consolidation of Paidy, partially offset by the absence of extraordinary gain in the same period of the previous fiscal year.

The 8th [Inc / (Dec)︓¥ 20.5 bil.]

Increased due to the recovery of daily sales resulting from the alleviation of the impact of COVID-19 and expanding product offerings as well as expense reduction by FamilyMart, the increased ownership percentage in FamilyMart, and the gain on the partial sale of Taiwan FamilyMart, partially offset by the absence of extraordinary gains in the same period of the previous fiscal year.

Others, Adjustments & Eliminations [Inc / (Dec)︓¥ 11.5 bil.]

Increased due to higher equity in earnings in CITIC Limited, partially offset by lower equity in earnings in C.P. Pokphand and higher tax expenses.

(*) % composition is calculated using the total of Non-Resource and	3
Resource sectors as 100%.

Net profit attributable to ITOCHU by Segment/Annual Forecast

（Unit : billion yen）

		FYE 2022	FYE 2022
	Previous Forecast	Revised Forecast
750			750.0
		23.0
700			70.0
650
600		550.0
550		200.0
	23.0
500		58.0
450			77.0
400		138.0
350			58.0
300		57.0	90.0
250		58.0
200		63.0	100.0
150
100		70.0	51.0
50		33.0	81.0
	50.0
Non- 0
	446.0	*560.0
Resource
Resource		142.0	*200.0
Others		(38.0)	(10.0)
Non-	(*)	76%	74%
Resource(%)
	* :Record High

Summary of Changes from the Previous Forecast

Textile [Inc / (Dec)︓¥ ±0 bil.]

In line with the previous forecast due to expense reduction and promotion of e-commerce business, while the impact of COVID-19 remains to some extent, and it is expected to be bottoming out especially in apparel-related companies.

Machinery [Inc / (Dec)︓¥ 12.0 bil.]

Increase due to the favorable shipping market, the improvement in profitability in YANASE, and the higher extraordinary gains compared to the previous forecast.

Metals & Minerals [Inc / (Dec)︓¥ 62.0 bil.]

Increase due to higher mineral resource prices, the stable performance in Marubeni-Itochu Steel, and the realization of foreign exchange gains due to the de-consolidation of ITOCHU Coal Americas.

Energy & Chemicals [Inc / (Dec)︓¥ 20.0 bil.]

Increase due to the improvement in profitability in upstream interests especially in CIECO Azer resulting from higher oil prices, in addition to the stable performance in chemical-related companies and energy trading transactions.

Food [Inc / (Dec)︓¥ ±0 bil.]

In line with the previous forecast due to the stable performance in North American grain-related companies and NIPPON ACCESS, offset by the deterioration in profitability in overseas meat-products-related companies due to lower market prices and cost increase.

General Products & Realty [Inc / (Dec)︓¥ 27.0 bil.]

Increase due to the favorable performance in North American construction materials business, higher equity in earnings in IFL(European pulp-related company) resulting from higher pulp prices, and the improvement in ETEL(European tire-related company).

ICT & Financial Business [Inc / (Dec)︓¥ 30.0 bil.]

Increase due to the higher gain on fund operation, the stable performance in retail finance business, and the gain relating to the sale of Paidy, which was developed from venture capital investment.

The 8th [Inc / (Dec)︓¥ 18.0 bil.]

Increase due to the steady recovery of daily sales, continuous expense reduction in FamilyMart, and the increased gain on the partial sale of Taiwan FamilyMart.

Others, Adjustments & Eliminations [Inc / (Dec)︓¥ 31.0 bil.]

Increase due to the stable performance in CITIC Limited, partially offset by lower equity in earnings in C.P. Pokphand.

(*) % composition is calculated using the total of Non-Resource and	4
Resource sectors as 100%.

Extraordinary Gains and Losses

Segments	FYE 2021	Major items
Q1-2 Results
		[Q2]
Textile	1.5	1.5	[Q2]Gain on the partial sale of a foreign company:1.5
Machinery	2.0	2.0	[Q2]Gain on the cash collection for a specific overseas
			project:1.0
Metals &	－	－
Minerals
Energy &	1.0	1.0
Chemicals
			[Q1-2]The loss related to the fire incident of distribution
	3.5	4.0	center in NIPPON ACCESS:－[Q1:(0.5), Q2:0.5]
Food	[Q2]Gain on the group reorganization
			in food-distribution-related companies:2.5
			Gain on the sale of a foreign company:1.0
General	1.5	1.5	[Q2]Lower tax expenses related to a domestic real
Products &
Realty			estate company:1.5
ICT & Financial	11.5	(0.5)	[Q1]Gain on the partial sale of eGuarantee:12.0
Business
			[Q1]Gain on the sale of a foreign company in FamilyMart:2.0
			[Q1-2]The loss related to the fire incident of distribution
The 8th	25.0	20.5	center in NIPPON ACCESS:－[Q1:(0.5), Q2:0.5]
Lower tax expenses related to FamilyMart:35.5
			[Q1:3.0, Q2:32.5]
			[Q2]Impairment losses in FamilyMart:(12.5)
Others,	3.5	3.5	[Q2]Gain on the investment in a group company of
Adjustments &
Eliminations			CITIC Limited:3.5
Total	49.5	33.5	[Q1-2]Non-Resource:49.5, Resource:－, Others:－

（Unit : billion yen）

FYE 2022	Major items
Q1-2 Results
	[Q2]

2.5 0.5 [Q1]Gain on the sale of fixed assets in EDWIN:1.0

[Q1]Gain on the sale of a water utility company in IEI:4.0

7.5 2.5 [Q2]Gain on the conversion of the bond to equity of Spire Global:2.5

22.0	－	[Q1]Realization of foreign exchange gains due to the
		de-consolidation of ITOCHU Coal Americas:22.0

－ －

1.0 1.0 [Q2]Gain on the partial sale of a domestic company:1.0

[Q1]Gain on the sale of Japan Brazil Paper & Pulp Resources

30.5 － Development:32.0

[Q1]Higher tax expenses in ETEL due to U.K. Tax Reform:(1.5)

30.5 30.5 [Q2]Gain on the de-consolidation of Paidy:30.5

29.5 － [Q1]Gain on the partial sale of Taiwan FamilyMart:29.5

(1.5) －

122.0 34.5 [Q1-2]Non-Resource:101.5, Resource:22.0, Others:(1.5)

1. Major items are shown in round figures.

5