Marubeni : Q&A of briefing on Financial Results for FYE 3/2022 has been uploaded.

Condensed Transcript of Question and Answer Session

Briefing on Consolidated Results for the Fiscal Year Ended March 31, 2022

Date:	May 10, 2022 (Tuesday)
Format:	Conference Call
Those Present:	Masumi Kakinoki,	President and CEO
	Takayuki Furuya,	Managing Executive Officer, CFO
	Hideyoshi Iwane,	Executive Officer,
		General Manager, Corporate Accounting Dept.

Disclaimer Regarding Forward Looking Statements and Original Language

This material contains forward‐looking statements about the future performance, events or management plans of Marubeni Corporation and its Group companies (the Company) based on the available information, certain assumptions and expectations at the point of disclosure, of which many are beyond the Company's control. These are subject to a number of risks, uncertainties and factors, including, but not limited to, economic and financial conditions, factors that may affect the level of demand and financial performances of the major industries and customers we serve, interest rates and currency fluctuations, availability and cost of funding, fluctuations in commodity and materials prices, political turmoil in certain countries and regions, litigation claims, changes in laws, regulations and tax rules, and other factors. Actual results, performances and achievements may differ materially from those described explicitly or implicitly in the relevant forward‐looking statements.

The Company has no responsibility for any possible damages arising from the use of information on this material, nor does the Company have any obligation to update these statements, information, future events or otherwise.

This material is an English language translation of the materials originally written in Japanese. In case of discrepancies, the Japanese version is authoritative and universally valid.

<1st questioner>

Assumptions for Gavilon's fertilizer business and Helena in FYE 3/2023 forecast for the Agri Business Division

CEO Kakinoki: Our FYE 3/2023 forecast for adjusted net profit of the Agri Business Division is a decline of ¥28 billion year‐on‐year. Of that amount, we expect a decline in profit of approximately ¥20 billion in Gavilon's fertilizer business and several billion yen at Helena.

Gavilon's fertilizer business saw profit surge to ¥30 billion in FYE 3/2022, well above its usual level of around ¥5 billion. In formulating the forecast for FYE 3/2023, we assumed that fertilizer prices would not continue to increase, which is why we are projecting profit to decline by about ¥20 billion. In the Agri Business, the forecast does not factor in possible shortfalls in fertilizer quantities.

Reasoning behind ¥2 dividend cut for FYE 3/2023. Especially in light of the upgraded credit rating, maintaining the policy of a payout ratio of 25% or more compares unfavorably with other trading companies. Possible changes in shareholder return policy.

CEO Kakinoki: While some thought we should keep the dividend for FYE 3/2023 unchanged at ¥62, we decided to follow our policy of a target payout ratio of 25% or more. Nevertheless, we are aware that our current payout ratio is low compared with other trading companies, and will consider measures to enhance shareholder returns while watching the improvement in our credit rating and handling of perpetual subordinated loans. In GC2021, we concluded the current phase of solidifying our operating foundation, which included rebuilding and strengthening our financial base. In formulating GC2024, although we felt that we should take drastic measures to shift to a more aggressive stance, for the dividend policy, we decided to maintain the target payout ratio at 25% or more, so we have decided on a ¥2 dividend reduction. We hope shareholders will see dividend increases through our profit growth.

<2nd questioner>

Possible changes in management direction considering drastic changes in the external environment CEO Kakinoki: Despite drastic changes in the external environment due to the manifestation of geopolitical risks, there are no changes in our management policies of strengthening existing businesses, creating new business models, and pursuing our Green Strategy.

Policy for allocation of free‐cash

CEO Kakinoki: Our first priority will be to allocate free‐cash to new investments. During GC2021, we concluded the current phase of strengthening our financial base, primarily through growth in core

operating cash flow and divestment of assets. Given the rapidly changing external environment, we believe we have to take a more aggressive approach under GC2024, and want to prioritize allocation of free‐cash to new investments. Specifically, we are thinking of making additional investments in businesses in which we had planted seeds last year, and switching to investments of a somewhat larger scale than the investments we had been making. This might raise some concerns about our investment discipline, but we have an established internal vetting process, which has raised the accuracy of prospective investment screening.

This does not mean all free‐cash will be allocated to new investments. We will also look at ways to enhance shareholder returns. For the three‐year period of GC2024, we will determine the level of distributions by considering overall balance, taking into account funds from the divestment and sale of the Gavilon grain business.

<3rd questioner>

Factors that will drive profit growth in non‐resource businesses from the FYE 3/2023 forecast to the FYE 3/2025 plan

CFO Furuya: Among improvements and revenue expansion of investments we have already made, we expect improvement in businesses that have been currently struggling, including Aircastle's aircraft leasing business, and in businesses we have recently invested in that are not progressing as planned. In addition, we expect the completion of several power‐business and infrastructure‐related projects. In other words, the increase in profit in non‐resource businesses through FYE 3/2025 will come mainly from improvement of existing businesses we invested in before GC2021. We expect investments we have yet to make to begin contributing to profits from FYE 3/2026, so we will steadily move forward with that in mind.

CEO Kakinoki: The results of Horizon 3‐type new investments take time to appear, and will require a period of patience to a certain extent. Strengthening existing businesses alone will not be enough for future growth, so we also want to invest in new businesses. We think it is strategic to make not only small investments but also investments of a larger scale, and to participate with an ownership ratio that allows us to lead the development and growth of the project. Although we have recently refrained from conducting large‐scale M&As, I would like to boldly take on the challenge of M&As as necessary if we see an opportunity that we can handle within our current capacity, after looking at the details.

<4th questioner>

Growth strategy in Agri Business after sale of the Gavilon grain business

CEO Kakinoki: The sale of the Gavilon grain business may cause a temporary drop in the earning capacity of the Agri Business, but the normal level of profit of the Gavilon grain business is limited to about ¥8‐10 billion. The scale of profit and the volume handled were relatively large, but we decided to sell the business because profitability was insufficient.

The growth of our U.S. grain business will now be focused on Columbia Grain International (CGI). To strengthen the U.S. grain origination and export business centered on CGI, we transferred some of Gavilon's assets and our equity interest in its grain export terminal business to CGI. CGI specializes in handling wheat as well as soybeans and corn. In addition, to increase its profit margin, it is venturing into downstream and processing businesses for specialty products, primarily in legumes. Currently, CGI's pretax profit is normally in the ¥4‐5 billion range, but we think it has potential to grow to around ¥10 billion several years from now.

We will continue to own the Gavilon fertilizer business. As a wholesaler, the business's customer network is one of the bests in the U.S., and if we can effectively use that network in collaboration with Helena, we think the expansion potential for the fertilizer‐related business is greater than what Helena would be capable of on its own.

Possibility of revisions to GC2024 such as capital allocation once funds from the sale of the Gavilon grain business have been collected

CEO Kakinoki: We are not planning to immediately reinvest the funds recovered from the Gavilon grain business simply to try to regain the profit of that business. That lost profit can be made up sufficiently with the Gavilon fertilizer business, CGI and Helena.

Basically, we will make investments in quality assets. For example, the funds from this divestment may be invested in businesses that are not agriculture‐related, such as new energy and mobility businesses. In other words, we will have more options for freely deciding on which fields to invest in.

<5th questioner>

Conditions for future share repurchases

CEO Kakinoki: We cannot speak to the exact timing of any share repurchases, but we now have more flexibility than we did before, and are in a position to implement repurchases at any time. For

example, if surplus funds are expected in a revision of the full‐year forecast, we could consider implementing a share repurchase immediately. Returns to shareholders are very important to us.

Current status and future outlook of Creekstone Farms

CEO Kakinoki: It is not off to a bad start. However, live cattle prices and input prices are rising, and because Creekstone has a very labor‐intensive business model, any labor shortage that occurs will drive up costs. On the other hand, we are making additional investments to expand this business, and are very confident that we can achieve the profit forecast for FYE 3/2023.

<6th questioner>

Risks identified in the business environment

CEO Kakinoki: Although the current business environment does not seem to be having any adverse impact at present, we are paying attention to trends in domestic demand in the United States. For example, we are engaged in the used car finance business, which targets U.S. domestic demand. The main customer base of this business is subprime and near‐prime borrowers, and the default rate was low until last year, but that could change if interest rates rise due to monetary tightening. We must quickly identify factors such as changes in consumers' behavior related to the end of monetary easing policies in the United States, and take those trends into account when considering potential investments.

Focus areas and businesses among future new investments

CEO Kakinoki: The United States is a key region for us. It has natural resources, is an agricultural powerhouse, and its robust domestic demand is unmatched by any other country. We will connect the platforms we have built in the United States, and build an even bigger platform to expand businesses targeting domestic demand. Another focus will be businesses targeting consumers in Southeast Asia, which has a relatively young population. We are steadily establishing bases, and think there are investments that we will be able to announce in the next one to two years.

<7th questioner>

Production volume and profit outlook of Chilean copper mining business

CEO Kakinoki: In the Chilean copper mining business, we expect the volume of higher‐grade ores to fall this fiscal year, and this will have some impact on profits. On the other hand, there is a proposed expansion project near the mining area we currently work, and the decision on whether to invest in