Mitsubishi Corporation

Business Overview

A Diversified Business Portfolio Across Industries

Mitsubishi Corporation (MC) operates a broad range of businesses in Japan and overseas, spanning natural resource development, trading and manufacturing, consumer products and services, finance, and logistics. In the fiscal year ended March 31, 2022, MC comprised 10 business segments: Natural Gas, Industrial Materials, Petroleum & Chemicals Solution, Mineral Resources, Industrial Infrastructure, Automotive & Mobility, Food Industry, Consumer Industry, Power Solution, and Urban Development. Its portfolio ranged from resource businesses such as natural gas and mineral resources to automobiles, food, retail and distribution, power, real estate, and urban development. (Annual Securities Report for the fiscal year ended March 31, 2022)

The 10-group structure continued in the fiscal year ended March 31, 2023, with the same basic configuration of Natural Gas, Industrial Materials, Petroleum & Chemicals Solution, Mineral Resources, Industrial Infrastructure, Automotive & Mobility, Food Industry, Consumer Industry, Power Solution, and Urban Development. In the fiscal year ended March 31, 2024, “Petroleum & Chemicals Solution” became “Chemicals Solution”, while the reportable segments still consisted of 10 groups. (Annual Securities Reports for the fiscal years ended March 31, 2023 and 2024)

Reorganization from 10 Groups to 8 in FY2024

FY2024 marked a turning point in MC's business structure. In the fiscal year ended March 31, 2025, its reportable segments consisted of 8 groups: Environmental Energy, Materials Solution, Mineral Resources, Urban Development & Infrastructure, Mobility, Food Industry, Smart-Life Creation (S.L.C.), and Power Solution. Mineral Resources, Food Industry, and Power Solution retained their names, “Automotive & Mobility” became “Mobility”, and the Environmental Energy, Materials Solution, Urban Development & Infrastructure, and S.L.C. categories were established. (Annual Securities Report for the fiscal year ended March 31, 2025)

Under the new structure, the Environmental Energy Group covers natural gas and LNG development and production, LPG and petroleum products, as well as next-generation energy. The Materials Solution Group handles materials businesses including petrochemicals, basic chemicals, functional materials, carbon and ceramics, and steel products. The Urban Development & Infrastructure Group includes urban development and real estate, data centers, ships, aerospace, industrial machinery, and energy infrastructure. The S.L.C. Group combines consumer-facing businesses with finance, digital, logistics, and related businesses. (Annual Securities Report for the fiscal year ended March 31, 2025)

Continuation of the 8-Group Structure in FY2025

In the fiscal year ended March 31, 2026, MC's reportable segments remained organized into 8 groups: Environmental Energy, Materials Solution, Mineral Resources, Urban Development & Infrastructure, Mobility, Food Industry, S.L.C., and Power Solution. This maintained the structure introduced in FY2024. The Environmental Energy Group covers natural gas and LNG, LPG and petroleum products, and next-generation energy. The Mobility Group covers automobile production, sales, sales finance, and after-sales services, as well as mobility services and EV- and battery-related businesses. The Food Industry Group spans activities from the production and procurement of raw materials to product manufacturing, illustrating how each group encompasses multiple business domains. (Annual Securities Report for the fiscal year ended March 31, 2026)

The Annual Securities Report for the fiscal year ended March 31, 2026 states that the reportable segments remained at 8 groups through the fiscal year-end. It also describes a subsequent reorganization into 7 groups, including the Energy & Power Solution Group created by integrating the Environmental Energy Group and the Power Solution Group. Accordingly, comparisons of reportable segments over the five-year period should treat the fiscal year ended March 31, 2026 as an 8-group structure and distinguish it from the subsequent 7-group structure. (Annual Securities Report for the fiscal year ended March 31, 2026)

Across the five years, MC maintained a business structure based on 10 groups from the fiscal years ended March 31, 2022 through 2024, before reorganizing into 8 groups in the fiscal year ended March 31, 2025. The company consistently operated across a broad range of fields, including resources, materials, mobility, food, consumer businesses, power and energy, and infrastructure, while the organizational categories used to group these businesses changed over the period. (Annual Securities Reports, fiscal years ended March 31, 2022–2026)

Business Environment and Strategy

Management Policy and Business Environment

From Midterm Corporate Strategy 2024 to Corporate Strategy 2027

During the first half of the five-year period, “Midterm Corporate Strategy 2024 - Creating MC Shared Value” was central to MC's management policy. Formulated in May 2022, the strategy responded to changes in the business environment, including rising geopolitical risks, restructuring of global supply chains, digitalization, and decarbonization. MC aimed to strengthen its integrated capabilities by “connecting” its extensive industry expertise and global network, and to continuously create MC Shared Value (MCSV) by addressing societal challenges. It also pursued investments in Energy Transformation (EX), Digital Transformation (DX), and other growth areas while seeking to maintain and expand its earnings base and sustain and improve double-digit Return on Equity (ROE). (Annual Securities Reports, fiscal years ended March 31, 2022–2024)

Midterm Corporate Strategy 2024 also emphasized the “Value-Added Cyclical Growth Model”, which combined investment-led growth with business portfolio replacement and improved capital efficiency. In the fiscal year ended March 31, 2024, MC explained that it was monetizing previously approved investments and advancing growth-strategy and MCSV-related investments, while also strategically reshaping its business portfolio and improving capital efficiency. (Annual Securities Report for the fiscal year ended March 31, 2024)

Under this policy, the organization was restructured from “10 Business Groups plus 2 divisions (Industry DX Group and Next-Generation Energy Business Group)” to “8 Business Groups” from FY2024. MC explained that the purpose was to rebuild an optimal execution structure aligned with business strategies and themes and to create MCSV on a larger scale. The reorganization of business segments described in the previous section took place against this management-policy backdrop. (Annual Securities Report for the fiscal year ended March 31, 2024)

In April 2025, MC formulated “Corporate Strategy 2027 - Leveraging our Integrated Strength for the Future”. The company recognized that uncertainty had increased further across political, economic, environmental, and technological dimensions as geopolitical and economic risks became more intertwined, decarbonization progressed at different speeds by region, and AI developed rapidly. Against this background, MC set out a policy of leveraging its “integrated strength,” based on diverse businesses, talent, and industry expertise, while flexibly revising strategies in response to the business environment and building an optimal business portfolio to support sustainable growth and higher corporate value. (Annual Securities Reports for the fiscal years ended March 31, 2025 and 2026)

The quantitative targets also changed. Under Corporate Strategy 2027, MC set an average growth rate of at least 10% for Underlying Operating CF as a core growth indicator and ROE of at least 12% in FY2027 as a capital-efficiency indicator. It also set a “Net D/E Ratio” of approximately 0.6x as an upper guideline, indicating an approach of using leverage strategically while maintaining financial soundness. The emphasis therefore shifted from targets centered on net income and ROE under Midterm Corporate Strategy 2024 to a combination of cash-generation capacity and capital efficiency. (Annual Securities Reports for the fiscal years ended March 31, 2025 and 2026)

The Annual Securities Report for the fiscal year ended March 31, 2026 also sets out a plan to integrate the Environmental Energy Group and the Power Solution Group and establish the “Energy & Power Solution Group” from the following fiscal year. MC explains that the objective is to consolidate energy-related products and capabilities and build flexible value chains by region in order to address diverse needs during the energy transition. (Annual Securities Report for the fiscal year ended March 31, 2026)

Across the five years, MC consistently emphasized using its “integrated strength” to respond to changes in society and industry. The way this was implemented shifted from Midterm Corporate Strategy 2024, centered on MCSV, EX and DX, and the Value-Added Cyclical Growth Model, to Corporate Strategy 2027, which more explicitly emphasizes business portfolio optimization, Underlying Operating CF growth, and capital efficiency. (Annual Securities Reports, fiscal years ended March 31, 2022–2026)

Sustainability Approach and Initiatives

Sustainability had been incorporated into MC's management strategy even before it became a standalone disclosure item. In the fiscal year ended March 31, 2022, MC redefined the important societal issues to be addressed through its business activities as “Materiality” and set out a policy of advancing low-carbon and decarbonization initiatives by classifying and monitoring businesses according to climate-transition risks and opportunities. It also presented a roadmap toward a carbon-neutral society, formulated in October 2021, targeting a 50% reduction in greenhouse gas (GHG) emissions by FY2030 compared with FY2020 and net zero by 2050, together with approximately JPY 2,000.0 billion of EX-related investment by FY2030. (Annual Securities Report for the fiscal year ended March 31, 2022)

From the fiscal year ended March 31, 2023 onward, MC continued to describe Materiality as important societal issues to be addressed through business activities and maintained the concept of growing together with society by creating shared value. For sustainability-related risks and opportunities, the disclosed governance structure shows the Sustainability Department formulating policies and measures, followed by discussion in committees and submission or reporting to the Executive Committee and the Board of Directors. (Annual Securities Reports, fiscal years ended March 31, 2023–2026)

Across the five years, MC continued to integrate decarbonization and responses to societal challenges into business strategy, investment decisions, and risk management rather than treating them as activities separate from management. Corporate Strategy 2027 likewise states that strategies will be reviewed in response to the business environment, taking into account factors including regional differences in the progress of decarbonization and energy security. (Annual Securities Reports, fiscal years ended March 31, 2022–2026)

Note: “Sustainability Approach and Initiatives” became a required section in Annual Securities Reports following disclosure-rule revisions in January 2023.

Business Risks

Risks Common Across a Broad Business Portfolio

Because MC operates across many countries, regions, and industries, it manages major risks including the global macroeconomic environment, market risk, credit risk, country risk, business investment risk, compliance, business interruption caused by crisis events, and climate change. The basic management framework, in which business groups coordinate with specialized corporate departments responsible for each risk, was maintained throughout the five-year period. (Annual Securities Reports, fiscal years ended March 31, 2022–2026)

Commodity-price fluctuations remain an ongoing risk for MC because of its resource and energy businesses. In addition, market movements in foreign exchange rates, interest rates, and share prices, counterparty creditworthiness, political and economic conditions in countries where MC operates, and deterioration in investee earnings are recognized as factors that can affect not only individual businesses but also consolidated results. For business investments, MC reviews investment objectives, risks, expected returns, and other factors when making new investments. After investment, it manages businesses through periodic business plans and considers ownership policies, including equity sales or liquidation, when earnings do not meet plans. (Annual Securities Reports, fiscal years ended March 31, 2022–2026)

Changes in Geopolitical and Economic Risks

Disclosures concerning the global macroeconomic environment reflect changes in external conditions over the five-year period. In the fiscal year ended March 31, 2022, downside risks included the Russia-Ukraine situation, U.S.-China tensions, and persistently high resource and energy prices, alongside the economic recovery from the COVID-19 pandemic. (Annual Securities Report for the fiscal year ended March 31, 2022)

The Russia-Ukraine situation and U.S.-China tensions continued to be identified as major sources of uncertainty, while inflation, interest-rate trends, and conditions in the Middle East were added. In the fiscal year ended March 31, 2025, MC also explicitly identified the effects of U.S. tariff policy on national economies. In the fiscal year ended March 31, 2026, it described uncertainty surrounding the global economy as remaining high, including U.S. trade and monetary policies and weakness in the Chinese economy. (Annual Securities Reports for the fiscal years ended March 31, 2025 and 2026)

Accordingly, the five-year period can be characterized less by a fundamental replacement of the overall risk framework than by changes in the specific regions, policies, and economic factors requiring attention within long-standing risk categories such as geopolitics, resources and energy, markets, and investments. (Annual Securities Reports, fiscal years ended March 31, 2022–2026)

Climate Change Risks

MC recognizes both transition risks arising from changes in policies and regulations, technology, and markets, and physical risks such as flooding and drought. At the same time, the spread of renewable energy, electric vehicles, and new energy-related technologies is also treated as a potential source of new business opportunities. MC has also established a framework for identifying material climate-related risks, conducting scenario analysis for businesses with significant exposure, and reflecting the results in business strategies. (Annual Securities Reports, fiscal years ended March 31, 2022–2026)

Management's Analysis of Financial Position, Results of Operations, and Cash Flows

Management's explanations of performance show that commodity-market conditions and changes in the business portfolio had a substantial impact on results over the five-year period.

In the fiscal year ended March 31, 2022, revenue increased as prices and transaction volumes rose amid economic normalization following the COVID-19 pandemic and improving market conditions. MC also attributed the increase in gross profit mainly to improved market conditions for Australian metallurgical coal and salmon farming, higher production and sales volumes in automotive-related businesses, and higher selling prices for steel products. (Annual Securities Report for the fiscal year ended March 31, 2022)

In the fiscal year ended March 31, 2023, revenue again increased due to higher market prices and transaction volumes amid persistently high resource prices and a weaker yen. MC cited higher market prices in the Australian metallurgical coal business and responses to changing market conditions in its integrated energy business in Europe among the factors that increased gross profit. (Annual Securities Report for the fiscal year ended March 31, 2023)

Conditions changed in the fiscal year ended March 31, 2024. Revenue decreased due to lower market prices, and gross profit also declined, mainly because of lower market prices in the Australian metallurgical coal business. At the same time, gains on investments included disposal and valuation gains in overseas power-generation businesses, while gains on property, plant and equipment included gains on sales of real estate and property, plant and equipment. Losses related to the salmon farming business were also recorded. Management's explanation shows that market factors, asset sales and valuations, and losses in certain businesses affected earnings concurrently. (Annual Securities Report for the fiscal year ended March 31, 2024)

In the fiscal year ended March 31, 2025, MC explained that lower transaction volumes and Lawson's change from a consolidated subsidiary to an equity-method affiliate reduced revenue and gross profit. The year-on-year change therefore reflected not only movements in the underlying businesses but also a change in consolidation treatment. (Annual Securities Report for the fiscal year ended March 31, 2025)

In the fiscal year ended March 31, 2026, revenue exceeded the previous year as the positive effect of higher market prices more than offset the continuing negative impact from Lawson's change to an equity-method affiliate. Gross profit, however, decreased due in part to the same change in Lawson's consolidation status. Gains on investments also decreased significantly, mainly because the previous year had included a revaluation gain associated with Lawson's transition to an equity-method affiliate. (Annual Securities Report for the fiscal year ended March 31, 2026)

Across the five years, management's explanations show that results were affected not only by commodity-market fluctuations but also by business disposals, changes in ownership interests, asset valuations, and asset sales. Some years are therefore difficult to compare based only on movements in revenue and profit. The actual financial figures and their effects on individual items are reviewed again in “Financial Overview”. (Annual Securities Reports, fiscal years ended March 31, 2022–2026)

Material Agreements

From the fiscal years ended March 31, 2022 through 2025, MC stated that there were “no matters requiring special mention” under “Material Agreements” or the corresponding disclosure item. (Annual Securities Reports, fiscal years ended March 31, 2022–2025)

A major development occurred in the fiscal year ended March 31, 2026. In January 2026, MC entered into equity transfer agreements to acquire all ownership interests in Aethon III LLC, Aethon United LP, and related entities engaged in the development, production, and sale of shale gas in Texas and Louisiana in the United States. The acquisition price was USD 5.2 billion, and Aethon is expected to become a wholly owned subsidiary if the prescribed conditions, including approvals from relevant authorities, are satisfied. (Annual Securities Report for the fiscal year ended March 31, 2026)

Aethon's shale gas interests are primarily located in the Haynesville area. At the time of the agreement, its attributable production was approximately 2.1 Bcf per day, equivalent to approximately 15 million tonnes of LNG per year. MC explained that the acquisition would strengthen the earnings base of its natural gas and LNG businesses and that it would consider building value chains beginning with upstream gas, taking into account its U.S. businesses in power, data centers, chemicals, and other areas. (Annual Securities Report for the fiscal year ended March 31, 2026)

Over the five-year period, the major change was the addition in the final year of a large acquisition agreement for a U.S. shale gas business, following several years in which no material agreements requiring disclosure had been reported. (Annual Securities Reports, fiscal years ended March 31, 2022–2026)

Research and Development Activities

For each fiscal year from March 31, 2022 through March 31, 2026, MC stated that there were “no matters requiring special mention” under “Research and Development Activities”. Accordingly, the Annual Securities Reports do not identify continuing research and development expenditures or changes in research themes that warrant separate discussion for this five-year period. (Annual Securities Reports, fiscal years ended March 31, 2022–2026)

Financial Overview

MC prepares its consolidated financial statements in accordance with IFRS. The following sections review the major changes over the five-year period, focusing on the Consolidated Statement of Financial Position, Consolidated Income Statement, and Consolidated Statement of Cash Flows.

Consolidated Statement of Financial Position

From the fiscal year ended March 31, 2022 to the fiscal year ended March 31, 2024, total assets increased from JPY 21,912.0 billion to JPY 23,459.6 billion, while equity attributable to owners of the Parent increased from JPY 6,880.2 billion to JPY 9,043.9 billion. The ratio of equity attributable to owners of the Parent rose from 31.4% to 38.6%. (Annual Securities Reports, fiscal years ended March 31, 2022–2024)

At March 31, 2024, Lawson's assets and liabilities were reclassified as held for sale, which was reflected in the Statement of Financial Position. Current assets increased by JPY 2,567.2 billion from the previous fiscal year-end, while non-current assets decreased by JPY 1,255.1 billion. MC explained that the reclassification of Lawson's non-current assets to assets held for sale was a major factor. (Annual Securities Report for the fiscal year ended March 31, 2024)

In the fiscal year ended March 31, 2025, Lawson changed from a consolidated subsidiary to an equity-method affiliate, and total assets decreased by JPY 1,963.5 billion from the previous fiscal year-end to JPY 21,496.1 billion. Within current assets, assets held for sale decreased. Non-current assets increased, including because MC's remaining interest in Lawson was recorded as an investment accounted for using the equity method and new right-of-use assets were recognized in LNG-related businesses. Total liabilities decreased by JPY 2,022.9 billion, while equity attributable to owners of the Parent increased by JPY 324.8 billion, raising the ratio of equity attributable to owners of the Parent to 43.6%. (Annual Securities Report for the fiscal year ended March 31, 2025)

In the fiscal year ended March 31, 2026, total assets increased by JPY 2,655.6 billion from the previous fiscal year-end to JPY 24,151.7 billion. Other financial assets and other current assets increased within current assets, while property, plant and equipment increased within non-current assets. Total liabilities also increased by JPY 2,559.3 billion to JPY 13,901.1 billion, with increases in bonds and borrowings reflected in both current and non-current liabilities. Equity attributable to owners of the Parent was JPY 9,440.6 billion, up only JPY 71.9 billion from the previous fiscal year-end, and the ratio of equity attributable to owners of the Parent decreased from 43.6% to 39.1%. (Annual Securities Report for the fiscal year ended March 31, 2026)

Within equity in the fiscal year ended March 31, 2026, retained earnings increased from JPY 6,637.5 billion to JPY 6,954.0 billion, and exchange differences on translating foreign operations also increased. Treasury stock, however, increased substantially from JPY 99.0 billion to JPY 1,113.5 billion. The accumulation of earnings and higher foreign currency translation adjustments was therefore offset in part by large-scale share repurchases, limiting the increase in equity attributable to owners of the Parent. (Annual Securities Report for the fiscal year ended March 31, 2026)

Consolidated Income Statement

From the fiscal year ended March 31, 2022 to the fiscal year ended March 31, 2023, revenue and gross profit increased substantially against the backdrop of higher resource and commodity prices. In the fiscal year ended March 31, 2023, revenue was JPY 21,572.0 billion, gross profit was JPY 2,560.0 billion, and profit attributable to owners of the Parent was JPY 1,180.7 billion, each at a high level within the five-year period. (Annual Securities Reports for the fiscal years ended March 31, 2022 and 2023)

Gross profit subsequently decreased to JPY 2,359.7 billion in the fiscal year ended March 31, 2024, JPY 1,836.4 billion in the fiscal year ended March 31, 2025, and JPY 1,655.1 billion in the fiscal year ended March 31, 2026. MC attributed the decrease in 2024 mainly to lower market prices in the Australian metallurgical coal business, the decrease in 2025 to factors including Lawson's transition to an equity-method affiliate and lower sales volumes in the Australian metallurgical coal business, and the decrease in 2026 to factors including the effect of Lawson's transition to an equity-method affiliate. (Annual Securities Reports, fiscal years ended March 31, 2024–2026)

Profit attributable to owners of the Parent did not move as directly with gross profit. Although gross profit decreased substantially year on year in the fiscal year ended March 31, 2025, profit attributable to owners of the Parent remained near the previous year's level at JPY 950.7 billion compared with JPY 964.0 billion. Earnings for the year included a revaluation gain associated with Lawson's transition to an equity-method affiliate, gains on sales of property, plant and equipment in the Australian metallurgical coal business, and the reversal effect and releases of provisions related to Chiyoda Corporation that had been recorded in the previous year. Meanwhile, impairment losses and other items related to domestic offshore wind power projects and lower equity-method earnings from Mitsubishi Motors Corporation contributed to a decrease in profit from investments accounted for using the equity method. (Annual Securities Report for the fiscal year ended March 31, 2025)

In the fiscal year ended March 31, 2026, revenue increased from the previous year to JPY 18,916.0 billion, while profit attributable to owners of the Parent decreased to JPY 800.5 billion. Gains on investments decreased from JPY 305.6 billion in the previous year to JPY 41.8 billion, mainly because the previous year included a revaluation gain associated with Lawson's transition to an equity-method affiliate. Gains and losses on property, plant and equipment also moved from a gain of JPY 134.6 billion in the previous year to a loss of JPY 9.3 billion, reflecting the absence of the previous year's gain on sales of property, plant and equipment in the Australian metallurgical coal business. Meanwhile, profit from investments accounted for using the equity method increased from JPY 337.5 billion to JPY 467.9 billion, partly due to the partial reversal of impairment losses recorded in prior years in the copper business. (Annual Securities Report for the fiscal year ended March 31, 2026)

The five-year profit trend therefore reflects not only resource prices and earnings trends in individual businesses, but also revaluation gains resulting from changes in ownership interests, gains on asset sales, and impairment losses and reversals. In particular, year-on-year comparisons for the fiscal years ended March 31, 2025 and 2026 include one-time gains and losses associated with Lawson's transition to an equity-method affiliate and the reversal of those effects. Changes in profit alone therefore do not fully represent changes in underlying business earnings. (Annual Securities Reports for the fiscal years ended March 31, 2025 and 2026)

Consolidated Statement of Cash Flows

Cash flows from operating activities remained above JPY 1,000.0 billion in each of the five years. They increased to JPY 1,930.1 billion in the fiscal year ended March 31, 2023 and remained at high levels thereafter: JPY 1,347.4 billion in 2024, JPY 1,658.3 billion in 2025, and JPY 1,490.0 billion in 2026. (Annual Securities Reports, fiscal years ended March 31, 2022–2026)

Cash flows from investing activities were negative throughout the five-year period. In the fiscal year ended March 31, 2025, outflows for capital expenditures and acquisitions of other investments, together with a reduction in cash and deposits associated with Lawson's transition to an equity-method affiliate, were partly offset by inflows from sales of certain mines in the metallurgical coal business and loan collections. Net cash used in investing activities was JPY 273.9 billion. (Annual Securities Report for the fiscal year ended March 31, 2025)

In the fiscal year ended March 31, 2026, net cash used in investing activities was JPY 448.6 billion, the largest outflow in the five-year period. Cash outflows included JPY 352.9 billion for purchases of property, plant and equipment and other assets, JPY 292.8 billion for purchases of investments accounted for using the equity method, and JPY 226.1 billion for purchases of other investments, while proceeds from asset sales and investment recoveries were also recorded. (Annual Securities Report for the fiscal year ended March 31, 2026)

Cash flows from financing activities were also negative throughout the five-year period. In the fiscal year ended March 31, 2026, proceeds from long-term debt and other financing were JPY 1,386.8 billion, while net cash used for purchases and sales of treasury stock was JPY 1,002.7 billion and dividends paid by MC were JPY 406.0 billion. As a result, net cash used in financing activities was JPY 804.7 billion. (Annual Securities Report for the fiscal year ended March 31, 2026)

In the fiscal year ended March 31, 2026, long-term debt and other financing, investing cash outflows, net cash used for purchases and sales of treasury stock, and dividend payments all occurred in the same year. On the Statement of Financial Position, liabilities including bonds and borrowings increased, as did treasury stock, while the ratio of equity attributable to owners of the Parent decreased from 43.6% in the previous year to 39.1%. (Annual Securities Report for the fiscal year ended March 31, 2026)

Major Changes Reflected in the Notes to the Financial Statements

One of the changes with the greatest effect on comparability over the five years was the change in Lawson's consolidation treatment. At the end of the fiscal year ended March 31, 2024, Lawson's assets and liabilities were reclassified as held for sale, and in the fiscal year ended March 31, 2025, Lawson changed from a consolidated subsidiary to an equity-method affiliate. This changed the scope of comparison for total assets, liabilities, revenue, gross profit, selling, general and administrative expenses, and other items, while a revaluation gain on the fair value of the remaining interest was also recognized in profit or loss. (Annual Securities Reports for the fiscal years ended March 31, 2024 and 2025)

In the fiscal year ended March 31, 2025, new leases also commenced in LNG-related businesses, increasing right-of-use assets and lease liabilities. In the fiscal year ended March 31, 2026, property, plant and equipment increased from JPY 2,873.0 billion to JPY 3,499.2 billion, while liabilities including borrowings also increased substantially. In the latter half of the five-year period, changes in the scope of consolidation resulting from business portfolio changes and new investment and financing activities were reflected in the financial position at the same time. (Annual Securities Reports for the fiscal years ended March 31, 2025 and 2026)

Dividend Policy

Shareholder Returns Centered on Progressive Dividends

MC maintained a progressive dividend policy throughout the five-year period. Under “Midterm Corporate Strategy 2021”, referenced in the Annual Securities Report for the fiscal year ended March 31, 2022, the company maintained a policy of progressively increasing dividends in line with sustainable earnings growth. The annual dividend for FY2021 was ¥150 per share. (Annual Securities Report for the fiscal year ended March 31, 2022)

Under “Midterm Corporate Strategy 2024”, covering FY2022 through FY2024, the basic policy likewise called for progressive dividends that would increase in line with sustainable earnings growth. MC also set out a policy of conducting flexible share repurchases under financial discipline, with a target total payout ratio of approximately 30%–40% and approximately 40% for FY2023 and FY2024. The company stated that its return policy would balance financial soundness, stable dividend growth, and market expectations for shareholder returns. (Annual Securities Reports for the fiscal years ended March 31, 2023 and 2024)

Under “Corporate Strategy 2027”, covering FY2025 through FY2027, MC continues to maintain progressive dividends and flexible share repurchases as its basic policy. However, the 30%–40% numerical target for the total payout ratio stated under Midterm Corporate Strategy 2024 is not included in the shareholder-return policy described in the Annual Securities Reports under Corporate Strategy 2027. (Annual Securities Reports for the fiscal years ended March 31, 2025 and 2026)

Corporate Strategy 2027 sets a “Net D/E Ratio” of approximately 0.6x as an upper guideline for financial soundness and states that MC will use leverage strategically while maintaining financial soundness. It also sets out investment plans through FY2027 and states that, if additional allocation capacity arises depending on cash-flow conditions, MC will consider allocating funds to investments or additional shareholder returns based on factors including the status of investment opportunities. (Annual Securities Report for the fiscal year ended March 31, 2026)

Trend in Annual Dividend per Share

The following table shows annual dividend per share and the dividend payout ratio as presented in the latest Annual Securities Report, reflecting the 3-for-1 stock split of common shares effective January 1, 2024.

(Annual Securities Report for the fiscal year ended March 31, 2026)

Note: Because MC conducted a 3-for-1 stock split of common shares effective January 1, 2024, prior-year dividend amounts per share are presented on the post-split basis shown in the latest Annual Securities Report.

Annual dividend per share increased in every year, from ¥50 per share in the fiscal year ended March 31, 2022 to ¥110 per share in the fiscal year ended March 31, 2026. It increased particularly from ¥70 per share in 2024 to ¥100 per share in 2025, and then to ¥110 per share in 2026. (Annual Securities Reports, fiscal years ended March 31, 2022–2026)

The dividend payout ratio varied by year: 55.0% in the fiscal year ended March 31, 2022, 20.8% in 2023, 33.9% in 2024, 49.7% in 2025, and 53.2% in 2026. (Annual Securities Reports, fiscal years ended March 31, 2022–2026)

Viewed across the five years, the dividend payout ratio did not remain at a constant level, while annual dividend per share increased every year. This is consistent with the progressive dividend policy repeatedly set out under MC's successive management strategies.

Shareholder Returns Including Share Repurchases

Under Midterm Corporate Strategy 2024, MC set out a policy of conducting flexible share repurchases under financial discipline in addition to progressive dividends. Corporate Strategy 2027 continues the basic policy of maintaining progressive dividends while conducting flexible share repurchases. (Annual Securities Reports, fiscal years ended March 31, 2023–2026)

In the Consolidated Statement of Cash Flows for the fiscal year ended March 31, 2026, net cash used for purchases and sales of treasury stock was JPY 1,002.7 billion, while dividends paid by MC were JPY 406.0 billion. (Annual Securities Report for the fiscal year ended March 31, 2026)

In the same year, proceeds from long-term debt and other financing were JPY 1,386.8 billion, while MC also made investment outlays including purchases of property, plant and equipment and investments accounted for using the equity method. (Annual Securities Report for the fiscal year ended March 31, 2026)

Under Corporate Strategy 2027, MC maintains progressive dividends and flexible share repurchases as its basic policy while preserving financial soundness and considering allocations to investments or additional shareholder returns according to investment opportunities and cash-flow conditions. (Annual Securities Report for the fiscal year ended March 31, 2026)

Across the five-year period, the basic policy of progressive dividends remained in place, and annual dividend per share increased from ¥50 to ¥110 on a post-split basis. (Annual Securities Reports, fiscal years ended March 31, 2022–2026)

In terms of how the return policy was expressed, Midterm Corporate Strategy 2024 included a numerical target total payout ratio of 30%–40%. Corporate Strategy 2027, by contrast, maintains progressive dividends and flexible share repurchases as the basic policy and provides for cash allocation between investments and additional shareholder returns depending on cash-flow conditions. (Annual Securities Reports, fiscal years ended March 31, 2023–2026)

Key Financial Indicators

The following tables summarize five-year trends in key consolidated indicators based on the consolidated financial indicators presented in the Annual Securities Report for the fiscal year ended March 31, 2026.

Revenue and Profit

(Annual Securities Report for the fiscal year ended March 31, 2026)

Revenue, gross profit, and profit attributable to owners of the Parent all reached their highest levels within the five-year period in the fiscal year ended March 31, 2023. Revenue subsequently remained broadly in the JPY 18,000 billion to JPY 19,000 billion range, while gross profit and profit attributable to owners of the Parent decreased. Lawson changed from a consolidated subsidiary to an equity-method affiliate in the fiscal year ended March 31, 2025, changing the scope of comparison for revenue, gross profit, and other items. The five-year figures therefore do not all reflect the same scope of consolidation. (Annual Securities Reports for the fiscal years ended March 31, 2025 and 2026)

Financial Position and Capital Efficiency

(Annual Securities Report for the fiscal year ended March 31, 2026)

Equity attributable to owners of the Parent and BPS increased throughout the five-year period. ROE, however, peaked at 15.8% in the fiscal year ended March 31, 2023 and declined to 8.5% in the fiscal year ended March 31, 2026. Total assets and the ratio of equity attributable to owners of the Parent did not move in a single direction, reflecting factors including Lawson's transition to an equity-method affiliate in 2025 and increases in assets and liabilities in 2026. (Annual Securities Reports for the fiscal years ended March 31, 2025 and 2026)

Cash Flows

Unit: JPY billion

(Annual Securities Report for the fiscal year ended March 31, 2026)

Operating cash flow remained positive and above JPY 1,000.0 billion in every year of the five-year period. Investing and financing cash flows were negative in every year, while the investing cash outflow increased in the latter part of the period. Cash and cash equivalents at year-end declined in the fiscal year ended March 31, 2024 and then rose to their highest level of the five-year period in the fiscal year ended March 31, 2026. (Annual Securities Report for the fiscal year ended March 31, 2026)

Note: MC conducted a 3-for-1 stock split of common shares effective January 1, 2024. In the Annual Securities Report for the fiscal year ended March 31, 2026, “Equity attributable to owners of the Parent per share”, “Basic earnings per share attributable to owners of the Parent”, and “Diluted earnings per share attributable to owners of the Parent” are calculated on the assumption that the stock split had taken place at the beginning of FY2021. (Annual Securities Report for the fiscal year ended March 31, 2026)

Five-Year Review

Across the five years, MC maintained a diversified business portfolio spanning resources, materials, mobility, food, consumer businesses, power and energy, and infrastructure, while changing the organizational structure used to group those businesses. The company moved from a structure based on 10 groups from the fiscal years ended March 31, 2022 through 2024 to 8 groups in the fiscal year ended March 31, 2025. The Annual Securities Report for the fiscal year ended March 31, 2026 also describes the subsequent reorganization into 7 groups. (Annual Securities Reports, fiscal years ended March 31, 2022–2026)

In management policy, MC continued to emphasize responding to changes in society and industry by leveraging its “integrated strength.” The implementation of this approach shifted from “Midterm Corporate Strategy 2024,” centered on MCSV, EX and DX, and the Value-Added Cyclical Growth Model, to “Corporate Strategy 2027,” which more explicitly emphasizes business portfolio optimization, Underlying Operating CF growth, and capital efficiency. The approach of integrating decarbonization and societal challenges into business strategy, investment decisions, and risk management also continued throughout the five years. (Annual Securities Reports, fiscal years ended March 31, 2022–2026)

In financial performance, revenue, gross profit, and profit attributable to owners of the Parent reached their highest levels within the five-year period in the fiscal year ended March 31, 2023, after which gross profit and profit attributable to owners of the Parent declined. Equity attributable to owners of the Parent and BPS, meanwhile, increased throughout the five years. In the latter half of the period, Lawson's transition to an equity-method affiliate changed the scope of consolidation, while revaluation gains, gains on asset sales, and subsequent reversal effects also affected profit or loss. Some years are therefore difficult to compare based only on changes in revenue and profit. Operating cash flow remained positive and above JPY 1,000.0 billion in every year, while investing cash outflows increased in the latter part of the period. (Annual Securities Reports, fiscal years ended March 31, 2022–2026)

For shareholder returns, the basic policy of progressive dividends continued throughout the five-year period, and annual dividend per share increased every year from ¥50 to ¥110 on a post-split basis. Midterm Corporate Strategy 2024 included a numerical target for the total payout ratio, while Corporate Strategy 2027 maintains progressive dividends and flexible share repurchases and provides for capital allocation based on financial soundness, investment opportunities, and cash-flow conditions. (Annual Securities Reports, fiscal years ended March 31, 2022–2026)

In the latter half of the five-year period, business portfolio and organizational restructuring, investment and financing activities, and shareholder returns progressed in parallel. A large acquisition agreement for a U.S. shale gas business was also added in the fiscal year ended March 31, 2026. Over the five years, MC retained its broad business base and its core approach of leveraging “integrated strength” while reshaping the specific form of its business structure, management targets, and capital allocation. (Annual Securities Reports, fiscal years ended March 31, 2022–2026)

Source: Mitsubishi Corporation Annual Securities Reports, fiscal years ended March 31, 2022–2026.