Marubeni Corp (8002) Q2 2027 Earnings Call Transcript

Condensed Transcript of Question and Answer Session Briefing on Consolidated Results for the Q2 of the Fiscal Year Ending March 31, 2027 Date: Format: Those Present:

November 4, 2026 (Wednesday) Hybrid Conference Masayuki Omoto, Director, Member of the Board, Representative Executive Officer, President and CEO Chijo Tajima, Director, Member of the Board, Representative Executive Officer, CFO Hideyoshi Iwane, Managing 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 damage 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> Regarding the revision to the full-year forecast for the “core Strategic Platform Businesses” on page 11 of the IR presentation, Helena and other businesses in the Agri-inputs Retail Business were revised upward this time. However, progress through the first half appears somewhat slow. Could you explain what is expected in the second half? CEO Omoto: We revised Helena upward based on current conditions in the field. U.S.China relations are easing, soybean flows remain solid, and demand from China is visible. In addition, U.S. government farm support has already been approved this year, about double the usual level, and we can expect some benefit from this as well. We will need to keep a close eye on weather conditions, but at this point we have no particular concerns. Together with the local management, we assume the grain cycle will turn upward, and this outlook reflects that. CFO Tajima: To add to that, Helena has tended to generate more profit in the second half in recent years. One reason is that, due to global warming, temperatures have been rising gradually and the planting season has moved slightly earlier than in the past, often beginning in March. Another factor is that farm machinery has improved significantly, allowing planting to be completed in a short period. In the past, profits were concentrated in the first half and declined in the second half, but if you look at 2024, 2025, and 2026, you can see that profits have become more weighted toward the second half. CEO Omoto: One more point: aside from Helena, Adubos Real in Brazil is generally second-half weighted because it operates in the Southern Hemisphere. In Brazil, demand for soybeans has started off well. In addition, Brazil has a new administration, and looking at its foreign exchange policy and other measures, we believe exports will also progress to some extent. We therefore expect Adubos Real to grow to a certain extent in the second half, and that is also reflected in our outlook. Regarding the Mobility Business in North America on page 11 of the IR materials, it was mentioned in the first quarter that Nowlake was struggling somewhat. What is the current situation? Could you also explain the factors behind the downward revision of the forecast? CEO Omoto: In the Mobility Business in North America, we revised our forecast downward for both Nowlake and the automotive parts sales business. For Nowlake, the revision reflects the fact that the difficult conditions of the first half have continued. The cause of this weakness is as we explained in the first quarter: deterioration in credit costs. We see signs of improvement in the actual results for September and October. Accordingly, we expect a slight improvement year on year in the second half. However, because the factors from the first half remain, we revised our forecast downward. For the automotive parts sales business as well, the factors from the first half were

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significant, and the revised forecast reflects them to a certain extent. <2nd questioner> On page 20 of the IR materials, profit and ROIC are disclosed under the category of core Strategic Platform Businesses (core SPBs). How are these businesses positioned within the Strategic Platform Businesses as a whole? I understand that it is the company’s policy to increase the proportion of its invested capital allocated to Strategic Platform Businesses over the medium to long term. Could you also explain what you mean by the word "core"? CEO Omoto: The key difference between core SPBs and other Strategic Platform Businesses lies in their scale. We call a business a core SPB once it has reached a certain scale and become a cohesive business. The approach of leveraging and linking assets to steadily enhance earnings and returns is common to all of our businesses. On that basis, for new investments in Strategic Platform Businesses, speed to profitability, that is, the path to reaching a 10% ROIC, is extremely important. As I mentioned at the recent IR Day, our investment criterion is to reach a 10% ROIC within five years at the latest after an investment is made. The new investments executed during the GC2027 period are expected to reach a 10% ROIC in about three years. Among the new investments in core SPBs made since FY2025 and listed on page 20 of the IR presentation, those in the Wholesale and Retail Power Trading Business and the Pharmaceutical Sales Business stand out for their ability to generate returns quickly, contributing to the projected ROIC of approximately 13% for FY2026. You have revised down the FY2026 forecast for the Wholesale and Retail Power Trading Business. We understand that the business environment in North America remains favorable. Could you update us on your assessment of the current operating environment? CEO Omoto: Following the one-off losses incurred by SmartestEnergy in the U.S. last fiscal year due to weather conditions and other factors, we have been operating the business under tight management control in the first half to ensure a solid turnaround. We expect earnings to recover steadily from the second half onward. <3rd questioner> The Energy & Chemicals Division's forecast has been revised upward significantly, and I understand that chemical trading performed particularly well. The market had initially regarded Q1 earnings as a temporary boost resulting from the closure of the Strait of Hormuz, but Q2 also appears to have generated a certain level of profit. Does this mean that the profit level of chemical trading has risen? In addition, my understanding is that manufacturers that had been sourcing chemicals from the Middle East increasingly turned to trading companies after suddenly losing their supply sources due to the closure of the Strait of Hormuz. Even if the Strait of Hormuz reopens, manufacturers are now fully aware of Middle East

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risk as a result of this event. Are new transactions increasing as customers seek to diversify their sources of supply? CEO Omoto: The earnings structure of the Energy & Chemicals Division will continue, although the situation differs by product. In short, ethylene performed very strongly in Q1, and naphtha performed very strongly in Q2. Sulfur, although smaller in scale, also benefits from stable supply and demand and is underpinning overall earnings, and we expect this to continue for some time. Taking the energy field into account as well, the main driver is expected to shift from ethylene and naphtha in the first half to LNG trading in the second half. Each product supports earnings in a different way depending on the circumstances. We expect ethylene and naphtha to generate a certain level of profit next year, and LNG prices are expected to remain high next year due to supply issues in Qatar and other factors. We therefore believe this structure will continue. It would be difficult to say that we will generate the same level of profit next fiscal year as this fiscal year, but we do not expect a significant decline. Regarding your second question, your understanding is correct. For example, approximately 60% of the naphtha used in Japan is imported, and about 80% of those imports are sourced from the Middle East. We handle roughly half of that 80%. We made tremendous efforts to secure alternative cargoes from around the world, sourcing them from South America, India and parts of the Middle East outside the Strait of Hormuz, among other regions, and delivered sufficient volumes to our customers. By firmly meeting our customers' needs without presenting unreasonable terms, we believe our presence in naphtha will grow. Many of our customers in Japan are concerned about the outlook for the Middle East situation, and demand for alternative sources and diversification has increased significantly. Based on this year's experience, a growing number of customers in India, South America and North America are also seeking alternative cargoes, and we believe we will increasingly be the first company they call. On that basis, if the market moves next fiscal year as well, we will be able to respond without missing opportunities. Within the core SPBs, the Mobility Business in North America has been revised downward. Could you break down the factors behind this revision in more detail, by operating company? CEO Omoto: Breaking down the Mobility Business in North America, we have revised our forecast downward by 5.0 billion yen compared with the outlook at the beginning of the fiscal year. Of this, approximately 3.0 billion yen relates to Nowlake and reflects its first-half results. The remaining 2.0 billion yen relates to the automotive parts sales business, which also reflects first-half results. Other operations are progressing almost as expected. For Nowlake, results for September and October show that credit losses and similar items have bottomed out and are improving. We also expect the secondhalf results to improve year on year. I have spoken with Nowlake's management, and they have told me that they will certainly exceed the second-half outlook. I am confident that this outperformance will be realized to a certain extent.

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<4th questioner> In the IR materials, core operating cash flow for each of the core Strategic Platform Businesses was disclosed for the first time. It appears to be growing faster than net profit, perhaps partly due to increased dividends from the equity-method investees within these businesses. Could you explain the outlook for the next fiscal year and beyond, including the sustainability of this growth? CEO Omoto: There are three main factors behind the difference between adjusted net profit and core operating cash flow: (1) the difference between dividends received and equity-method earnings, (2) taxes, and (3) the impact of new investments. The first is the difference between dividends received and equity-method earnings. Throughout this fiscal year, we have repeatedly emphasized the importance of core operating cash flow. For example, at affiliates such as Nowlake, we have held extensive discussions with management and worked to raise dividend payout ratios. The second is taxes. Timing differences between actual cash movements and accounting recognition mean that core operating cash flow structurally tends to be slightly higher than adjusted net profit. The third is the impact of new investments. Goodwill is treated differently in core operating cash flow and accounting profit, which also contributes to structurally higher core operating cash flow. Taken together, these factors explain why core operating cash flow structurally exceeds adjusted net profit. I understand that your main concern is whether dividends from affiliates such as Nowlake are sustainable. We have been in close dialogue with Nowlake’s management, explaining that, alongside growth in adjusted net profit, improving cash conversion and core operating cash flow is particularly important to us at this stage. We have reached a certain degree of shared understanding with management on this point. Going forward, while cash inflows may not reach this fiscal year’s level, we believe we can continue to generate cash inflows at a higher level than in the past. I would like to ask about your ROE target of 15% for FY2027. Earlier, you indicated that profit in the Energy & Chemicals Division may not decline significantly in FY2027. Does the upward revision to your full-year forecast signal greater confidence that continued profit growth will enable you to achieve ROE of 15% without substantial additional shareholder returns? Or, in light of the increase in planned new investments, do you intend to achieve the target through a combination of organic profit growth and returns from new investments? Could you explain the path you currently envisage? CEO Omoto: To achieve ROE of 15%, we first want to raise this fiscal year’s ROE as much as possible. Our current forecast is at a level that only just rounds up to 15%. Each additional 10.0 billion yen in net profit raises ROE by approximately 0.2 percentage points. For example, if net profit reaches 650.0 billion yen this fiscal year, we could consider the 15% ROE target to have been broadly achieved. The net profit forecast announced today is 630.0 billion yen. However, applying current commodity prices would imply potential upside of approximately 15.0 billion yen. We have also incorporated somewhat conservative targets for certain non-resources

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businesses into our second-half adjusted net profit forecast. Taking these factors into account, we intend to deliver further profit growth this fiscal year and strive to achieve ROE of 15%. Next fiscal year, our basic policy will likewise be to improve ROE by increasing net profit. We have several measures in place to drive profit growth, and we aim to achieve ROE of 15% by steadily delivering higher profits. Of the additional 200.0 billion yen in shareholder returns announced in the first quarter, 120.0 billion yen will be allocated to this fiscal year. We intend to deploy the remaining 80.0 billion yen at an appropriate time. However, in pursuing ROE of 15%, profit growth remains the primary driver, with shareholder returns playing a supporting role. <5th questioner> Regarding the improvement of existing businesses, the result for the first half was +37.0 billion yen. Which businesses contributed the most? The full-year forecast of +40.0 billion yen seems to assume a fairly conservative contribution from the second half. What is your view? Also, how much profit growth from the improvement of existing businesses should we expect from next fiscal year onward? CEO Omoto: As shown on the left side of page 4 of the IR materials, the main contributors to the improvement of existing businesses were the Chemical-related business, Aircastle, the Ship owning and operating business, and the PE fund management business. The Chemical-related business and Aircastle were the largest contributors, and the other two each contributed several billion yen. For the second half as well, we hope to steadily deliver improvement across our existing businesses, at a level comparable to the first half. However, in the resources business, we expect operation-related and other costs to increase in the second half, mainly due to higher diesel prices, and we have factored in a negative impact of slightly over 10.0 billion yen under the "improvement of existing businesses." On the other hand, since market prices have risen, there is upside under the "commodity price impact." Excluding this cost increase in the resources business, we expect the nonresources businesses to contribute around +20.0 billion yen from the improvement of existing businesses. We will explain the outlook for next fiscal year in more detail at a later date, but we aim to deliver a contribution of a similar scale to this fiscal year. Regarding the approach to the total payout ratio, the mid-term management strategy sets it at around 40%, but this fiscal year it exceeds 50%, which is quite high. What level should we assume going forward? CEO Omoto: In terms of shareholder returns, there is the concept of a total payout ratio expressed as a percentage. However, our current approach is based on the 900.0 billion yen in shareholder returns within the GC2027 three-year cumulative capital allocation, shown on the right side of page 13 of the IR materials. This amount includes the 200.0 billion yen increase in total shareholder returns, funded by free cash, that we

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announced with our Q1 results. At this point, we are committed to returning at least 900.0 billion yen to shareholders. On the cash inflow side, the three-year cumulative core operating cash flow of 2,000.0 billion yen could come in somewhat higher, reflecting next fiscal year's performance. If so, the discussion will turn to how we should approach shareholder returns on the cash outflow side. We will update you on this at a later date. <6th questioner> The dividend has been raised this time to 125 yen per share, with the total dividend amount increasing to 205.0 billion yen. From the standpoint of ensuring stable dividends over the medium to long term, could you share the discussions behind this decision? CEO Omoto: Under our policy of continuing a progressive dividend, we have adopted an overall strategy aimed at sustaining dividends on the order of 200.0 billion yen after this increase. Specifically, we have made cash flow a key focus, with the aim of enhancing the cash conversion rate from adjusted net profit and maximizing cash inflows. To support this, we have shaped our new investment portfolio with a focus on Strategic Platform Businesses, which provide a strong contribution to core operating cash flow. Based on these considerations as a whole, we determined that raising the dividend to 125 yen per share would still allow us to continue our progressive dividend, and therefore decided to increase the dividend.

Creekstone recorded a sizable loss in the first half. Also, according to the annual securities report, approximately 54.0 billion yen was recorded as property, plant and equipment as of March 31, 2026. While you said the consolidated full-year forecast includes no buffer, how do you assess the fair value of Creekstone’s related assets? CEO Omoto: Let me start with the current situation at Creekstone. The first half has been very challenging, but we are also seeing some positive signs, and September on a standalone basis was around break-even. The general consensus is that the cattle cycle is now at the bottom. At the operational level, efforts to refine operations are steadily progressing, including creating high added value products, raising productivity, and improving yields. I personally visited the site in September, and as a side note, the taste has improved as well. Once the cattle cycle in the U.S. turns back upward, I believe Creekstone’s earnings will recover quite quickly and stage a sharp turnaround, especially as the brand is already well recognized. In fact, I have high expectations for next year. In light of this, regarding your question on fair value—that is, whether there is any impairment concern—the answer is no. <7th questioner> Given the level of earnings in FY2026, how do you view the sustainability of earnings in FY2027? In particular, could you share your outlook for energy and copper prices in light of the situation in the Middle East, as well as your assumptions for asset

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recycling gains in FY2026 and FY2027? CEO Omoto: Regarding commodity market conditions in FY2026 and FY2027, we believe that current conditions could well continue. For example, some forecasts suggest that Brent and WTI prices, as well as the JKM price, may ease somewhat, while Henry Hub natural gas prices may rise modestly. Overall, however, we expect resource prices to remain elevated. We do not anticipate a significant decline in copper prices from current levels either. At this stage, we are proceeding with our planning based on this outlook. We expect asset recycling gains of 40.0 billion yen in FY2026. In FY2027 and beyond, we also intend to continue recording a certain level of gains as we proceed with divestments. We currently envisage gains of approximately 30.0–40.0 billion yen, although the actual amounts and timing will depend on factors such as the progress of negotiations with counterparties. Regarding investment returns, page 20 of the IR materials shows that the core Strategic Platform Businesses (core SPBs) in which investments have been executed since FY2025 are expected to achieve a relatively high ROIC of approximately 13% in FY2026. Is this supported by sustainable business performance, or does it reflect onetime factors? Also, what level of returns can be expected from investments in Strategic Platform Businesses in FY2027 and beyond? CEO Omoto: The 16.0 billion yen profit contribution shown on page 20 from core SPBs in which investments have been executed since FY2025 is the sum of the contributions from the individual businesses shown on the left-hand side of that page. It does not include any one-time factors, and we believe these earnings can be sustained going forward. The Pharmaceutical Sales Business is relatively sensitive to drug price trends. However, we do not foresee developments that would lead to drug price reductions in FY2026, and we are closely monitoring whether the business can maintain its current earnings level in FY2027 and beyond. Factorenergia, which we acquired through SmartestEnergy and which operates in Iberia and Latin America, has benefited from strong electricity demand in Iberia, as well as the early realization of some synergies through collaboration with SmartestEnergy. For new investments going forward, as explained at IR Day, our criterion is to achieve an ROIC of 10% within five years of investment at the latest. Achieving this level as early as possible is critically important to improving ROE, and we have shared internally our intention to aim for this within approximately three years. However, actual returns and the timing of achieving the target will vary by investment. Whether the performance of the businesses shown on page 20 can serve as a benchmark for future investments will therefore depend on the individual investment. We are working toward an ROE of 15% in FY2026 as well. In FY2027, we will continue to aim for 15% through a combination of improvements of existing businesses, growth investments, and asset recycling gains.

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<8th questioner> How much impact from the Middle East situation do you expect this fiscal year? You have mentioned increased operating costs in the resources business, while there is also upside from the commodity price impact. What is the net amount for the first half and for the full year? CEO Omoto: The Chemical-related business was positively affected. On the other hand, a number of businesses were negatively affected, mainly downstream businesses in Japan. Against the backdrop of higher gas prices and other factors, the domestic power business, domestic manufacturing businesses, overseas IPP projects and others have been negatively affected to a certain degree. On a net basis, the impact was approximately +7.0 billion yen in the first half. However, we expect a negative impact of a similar amount in the second half, and we therefore view the full-year forecast as broadly neutral. You are planning approximately 410.0 billion yen in new investments for the second half of FY2026. At the recent IR Day, you explained that you would pursue around three to four large-scale projects. I see high-ROIC, large-scale new investments as an extremely important piece in assessing performance from next fiscal year onward. How confident are you in realizing them, and what should we expect? CEO Omoto: Compared with the time of our first-quarter results, the number of internally approved projects has increased somewhat, and these include projects that can reasonably be expected to reach a 10% ROIC in about three years. We feel a certain degree of confidence. Regarding improvements of existing businesses, how do you assess the results achieved by the Value Creation Office (VCO)? CEO Omoto: Improvements of existing businesses require sustained efforts at the operational level, and we recognize that it will take time for these efforts to yield results. One illustrative example is Creekstone, where VCO has consolidated supplier data to provide company-wide visibility and is working with management to optimize procurement. These initiatives are beginning to yield some results. As Creekstone’s earnings improve, we believe we will also be able to show the procurement cost savings achieved through VCO’s efforts. This is one example of the ongoing work at our operating companies to improve pricing, inventory management, and other aspects of their operations. Taken together, we expect these efforts to make a meaningful contribution to the projected profit increase of 40.0 billion yen from improvements of existing businesses this fiscal year. <9th questioner> Following up on the earlier question, planned new investment over the three-year period has increased by 250.0 billion yen compared with the plan at the beginning of the fiscal year. At the same time, you indicated that you would proceed only with carefully selected projects. I therefore understand that an expanded pipeline does

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not necessarily translate directly into increased investment. With interest expenses also rising, how much additional leverage would you be comfortable taking on in the next fiscal year, and how do you view the balance between investment and leverage? Could you also explain the factors behind the increase in planned new investment? CEO Omoto: In the first half, we announced a revision to our capital allocation to utilize up to 250.0 billion yen in additional leverage. Our view is that utilizing this amount would not affect the A rating category we received from S&P in November last year. We therefore intend to balance the use of leverage with maintaining our A rating. Maintaining an A rating category helps us optimize not only our funding costs in a rising interest rate environment, but also credit costs in our trading operations. We believe that preserving the rating also contributes to improved profitability, and we intend to manage our capital allocation with this balance in mind. The expansion of our new investment pipeline reflects an increase in the scale of investment per project. Since the last fiscal year, we have further strengthened our investment review framework, implementing a disciplined process in which the reviewing teams and the teams proposing investments repeatedly discuss issues relating to each project. This increases the human resources committed to each project and the associated opportunity costs. While the number of projects has not changed significantly, the investment amount per project has increased. We are also pursuing opportunities to make affiliated companies and Strategic Platform Businesses into subsidiaries. Where we have the relevant expertise and see scope for taking a subsidiary position, our approach is to do so and capture the cash flows from those businesses. We believe these initiatives are also contributing to the expansion of our pipeline. As the results of the U.S. midterm elections come in, the Democrats appear to be making significant gains. Your exposure to the United States is substantial, exceeding 1 trillion yen. While I would not expect an immediate impact on earnings, I believe there could be both positive and negative implications for businesses such as EagleRidge in natural gas, power and renewable energy, and food and agriculture. Are there any businesses to which we should pay particular attention? CEO Omoto: We have a diverse range of businesses, including agriculture, finance, energy, and livestock. At this stage, we do not expect the results of the midterm elections to have an immediate impact on our earnings. Our U.S. businesses primarily serve domestic demand. However, we will be closely monitoring developments in trade with Canada and China. Particularly in agriculture, we believe that greater flows of goods help support a more vibrant U.S. domestic economy. We also have aluminum operations in Canada, so trade policy is an area we will continue to watch closely. Another area, although it does not directly relate to our businesses, is the continued development of AI and data centers, and how financing and credit are provided to support that growth. We believe that growth in AI data centers is currently driving the

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broader U.S. economy. We will therefore pay particular attention to whether policies continue to support sustained growth in this area. <10th questioner> If there is any room for upside in the full-year forecast for the non-resources fields, could you give us some indication as to which segments it may come from? Looking at the first-half results and the full-year forecast for adjusted net profit, my impression is that some segments may find it slightly difficult to achieve their targets. I would appreciate any insight you could share on where you see opportunities. CEO Omoto: I imagine that what you are particularly concerned about is a possible shortfall in second-half adjusted net profit in the IT Solutions Division. However, this business was always expected to be second-half weighted, and since we have a clear view of the project pipeline, we expect it to execute firmly. As for where any additional upside may come from, my answer would be that it is scattered across multiple areas. For instance, in the Energy & Chemicals Division, we are somewhat conservative in parts of our second-half assumptions, and there is room for positive factors such as naphtha short-covering. In the Finance, Leasing & Real Estate Business Division, leasing-related businesses were very strong in the first half and may continue to gain momentum in the second half. In the Power & Infrastructure Services Division, Senoko, which is outside the Strategic Platform Businesses, has recently shown some improvement. We would also cite pharmaceuticals, Creekstone, and others. If all of the items we currently view conservatively were to materialize, I believe there is ample potential for consolidated net profit to exceed the full-year forecast of 630.0 billion yen. Regarding Aircastle, could you explain its approach and strategy for improving ROE excluding gains on aircraft sales? Market conditions are favorable, earnings are growing, and the outlook appears positive. However, Aircastle has recently been purchasing a considerable number of new-generation aircraft, which, from an outside perspective, could suggest some change in strategy. Beyond benefiting from favorable market conditions, what measures does Aircastle intend to take on its own to improve profitability? CEO Omoto: Our understanding is that Aircastle’s overall aircraft leasing strategy has not changed significantly. While it has been shifting to somewhat younger aircraft in view of the risk of technological obsolescence, the underlying model remains the same: acquire mid-life aircraft and enhance their value through remarketing. We believe Aircastle has built a solid portfolio and continue to have high expectations. We are also considering an asset-management-type business model that could help improve ROE going forward. <11th questioner> With interest rates rising globally, could you provide a comprehensive overview of the impact on your businesses, including areas such as U.S. credit that have been discussed previously?

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CFO Tajima: The most important thing in a rising interest rate environment is to pass on higher funding costs. At the company-wide level, the key is how to achieve ROIC that covers the rising WACC. In addition to ensuring high profitability, we recognize the importance of making acquisitions that contribute to earnings sooner, as interest costs mean that time itself carries a financial cost. I understand that your question refers primarily to Nowlake in North America. Here, too, the key is whether higher funding costs can be passed on to customers. At present, we have not seen any particular deterioration in earnings due to rising interest rates. What matters most, however, is that the used car market remains firm, with a reasonable level of transaction activity, and that used car prices—and thus the value of Nowlake’s collateral—remain relatively stable. CEO Omoto: I would like to add two points. First, Nowlake and Aircastle, our finance businesses in North America, have a portion of their funding at fixed interest rates. As a result, there is a time lag before rising interest rates affect their earnings. Second, for our Strategic Platform Businesses, we select businesses that generate high returns on invested capital and deliver high added value to customers. We therefore believe that continuing this portfolio strategy will enable us to absorb the impact of rising interest rates to some extent.

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