Edgar Filing: MITSUI & CO LTD

Form 6-K

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Private Issuer

Medium-term Management Outlook

Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of 1934

For the month of May 10, 2006

Commission File Number 09929

Mitsui & Co., Ltd.

(Translation of registrant’s name into English)

2-1, Ohtemachi 1-chome Chiyoda-ku, Tokyo 100-0004 Japan

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F X Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes No X

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: May 10, 2006


MITSUI & CO., LTD.

By:		/s/ Kazuya Imai
Name:		Kazuya Imai
Title:		Executive Director Senior Executive Managing Officer Chief Financial Officer

LOGO

May 10, 2006

To Whom It May Concern:

Mitsui & Co., Ltd.

Mitsui & Co., Ltd. — Medium-term Management Outlook

Mitsui & Co., Ltd (“Mitsui”) has released Overview of Medium-term Strategic & Financial Plan Global Growth 2006 and Medium-term Management Outlook - Mitsui’s business and financial vision 3-5 years ahead.

For further information, please contact

Investor Relations Division

Mitsui & Co., Ltd.

Tel: +81-3-3285-7910

Fax: +81-3-3285-9819

E-mail: infoTKADZ@mitsui.com

Overview of Medium-term Strategic & Financial Plan

Global Growth 2006

Medium-term Management Outlook

Mitsui’s business and financial vision 3-5 years ahead

Mitsui & Co., Ltd.

May 10, 2006

A Cautionary Note on Forward-Looking Statements:

This material contains statements (including figures) regarding Mitsui & Co., Ltd. (“Mitsui”)’s corporate strategies, objectives, and views of future developments that are forward-

looking in nature and are not simply reiterations of historical facts. These statements are presented to inform stakeholders of the views of Mitsui’s management but should not be

relied on solely in making investment and other decisions. You should be aware that a number of important risk factors could lead to outcomes that differ materially from those

presented in such forward-looking statements. These include, but are not limited to, (i) change in economic conditions that may lead to unforeseen developments in markets for

products handled by Mitsui, (ii) fluctuations in currency exchange rates that may cause unexpected deterioration in the value of

transactions, (iii) adverse political developments

that may create unavoidable delays or postponement of transactions and projects, (iv) changes in laws, regulations, or policies in any of the countries where Mitsui conducts its

operations that may affect Mitsui's ability to fulfill its commitments, and (v) significant changes in the competitive environment. In the course of its operations, Mitsui adopts

measures to control these and other types of risks, but this does not constitute a guarantee that such measures will be effective.

68.4

121.1

202.4

100

7.5%

11.6%

14.5%

9.0%

04/3

05/3

06/3

Mid-term Plan

Net income

ROE

Review of Mid-term Plan 2006

Nearly all segments expanded earning base supported by global economic growth

Current assets grew as transactions increased; Investment in mineral resources, energy and

infrastructure projects led to an increase in total assets

Shareholders’

equity increased, ROE improved and Net DER declined

Forex

rate (¥/US$)

Oil price-(US$/bbl)

110

105

113

108

Iron ore price-(US$/DLT)

(representative price of fine ore)

(announced in May 2004)

100.1

200.1

146.4

-134.2

-224.0

-347.3

-34.1

-23.9

-200.9

Operating C/F

Investment C/F

Free C/F

Overview of Mid-term Plan

3.17

3.54

4.42

2.93

1.12

3.82

3.57

4.75

3.32

1.68

2.77

3.36

3.93

2.38

0.96

Current

assets

Investments

Other

assets

Other

Liabilities

Shareholders’

equity

*(2.65)

*(2.72)

*(2.83)

04/3

06/3

05/3

Total assets ¥6.7

trn

Equity ¥0.96 trn

Net DER 2.8 X

(*) Figures in brackets in interest-bearing debt are “net interest-bearing debt”,

which is interest-bearing debt minus cash and cash equivalents and time deposits.

04/3

05/3

06/3

Balance Sheet

(¥

trillion)

Cash Flow

(¥

billion)

Total assets ¥7.6 trn

Equity ¥1.12 trn

Net DER 2.4 X

Total assets ¥8.6 trn

Equity ¥1.68 trn

Net DER 1.7 X

Interest-

bearing debt

-32.5

-45.9

-24.2

11.3

29.0

41.2

13.4

17.5

20.9

30.6

11.6

19.4

42.8

40.9

18.7

35.4

54.7

11.4

12.1

4.8

11.8

32.0

11.8

11.0

5.5

24.4

-6.9

-3.2

10.6

04/3

05/3

06/3

Net Income by Operating Segment: Year Ended March 2006

(¥-billion)

06/3: Main Factors of Year-on-Year Changes

68.4

121.1

202.4

Iron & Steel Products

Strong markets for steel tubular products and steel sheets/plates

for automobiles and shipbuilding

Iron & Steel Raw Materials and Non-Ferrous Metals

Iron ore and coal prices up, impairment losses at Mitalco

Machinery & Infrastructure Projects

Strong performance in auto-related and power generation businesses

Chemical

Strong

ammonia

market,

lower

DPF

charges

(

36bn

9bn)

Energy

Rise in crude oil price, increase in interest expense on Sakhalin II,

Arcadia sold, decrease in profit from domestic subsidiaries,

increase in tax expenses on dividends from subsidiaries

Foods & Retail

Impairment

losses

MITSUI

FOODS,

Gain

from

7&i

exchange

Lifestyle, Consumer Service, Information,

Electronics and Telecommunication

Strong

performance

NextCom

and

Telepark,

dividend

from

overseas

cell phone business

Logistics & Financial markets

Increase in equity in earnings of Mitsui Leasing

Overseas

Strong performance of Australian iron ore subsidiaries

All Others / Adjustments and Eliminations

Decline in valuation allowance for deferred tax assets; Increased gains

on sale of corporate real estate

16.5

9.1

40.1

65.9

94.2

130.8

206.9

265.8

17.5

04/3

05/3

06/3

Operating Income (=Gross Profit - SG&A Expenses)

Equity in Earnings of Associated Companies (Net)

Financial Profit (=Interest Expense, Net of Interest Income +

Dividend Income)

Earning Power: Year Ended March 2006

(¥-billion)

188.4

369.1

289.3

Gross profit and equity in earnings

of associated companies up in

nearly all segments

Interest expenses increased due to

Sakhalin II and other investments

etc, and higher US$ interest rates

Earning Power has nearly doubled between 04/3 and 06/3

Note:

•

Earning Power = Operating Income + Financial Profit + Equity in Earnings of Associated Companies (Net)

•

Figures from 04/3 to 05/3 have not been reclassified in line with SFAS144.

•

Net

financial

Revenues

certain

subsidiaries

engaged

mainly

consumer

financing

are

presented

gross

profit

from

05/3,

and are presented as interest income-net for 04/3.

Overview of Mid-term Plan: Key Points

•

Continuous Review of our Business Portfolio

–

Active investment focused on Core areas and other Key areas

–

Significant improvement in net income of subsidiaries and associated companies, but total of net

losses of unprofitable companies exceeded the target

•

Evolution

our

Business

Models

Leveraging

Business

Engineering

Capabilities

–

Acquired BS digital broadcast license, planning mobile phone-based internet service with TBS

–

Expanding comprehensive business alliance with 7&i Holdings

–

Expanding

outsourcing

businesses

such

Quintiles

Transnational

Japan

K.K.,

and

Moshi-

Moshi

Hotline

•

Implementation of Global Strategy

–

Implementation of Asian Regional Managing Directorship, established product/service-based

Business Division System in Europe, established three trading companies for wholesale trade in

China

•

Reinforcement of Management Framework to Support Further Growth

–

Compliance with SOX 404, Reorganization of corporate staff divisions

–

Ensuring a thorough compliance awareness, based on the lessons learnt from the DPF incident

Completed investment of ¥680 billion over 2 years

(vs. plan ¥500 billion)

Investment Plans

(¥

billion)

Reinforcing mineral resources & energy businesses

Developing new businesses in growing markets

Expanding the stable earnings base

Note: The ¥70 billion difference between the total investment over two years and the

investments in projects noted above is accounted for by investments in other areas.

05/3

06/3

Total

LNG-Oil

Sakhalin II-Enfield-Equatorial Guinea, etc.

150

120

270

Iron Ore, Coal, Nickel, etc.

Infrastructure -

IPPs/Water supply etc.

160

IYG-TBS-Quintiles,

etc.

100

120

TOTAL

260

420

680

Operating Results of Subsidiaries and Associated Companies

(¥-billion)

94.3

94.0

115.7

261.3

184.9

-47.3

-71.1

-53.4

-34.5

-62.2

150.4

199.1

47.0

22.9

62.3

02/3

03/3

04/3

05/3

06/3

Loss from loss-making businesses

Income from profitable businesses

Net

06/3

•

Combined total net income increased by approx. ¥50

billion to ¥199.1 billion

•

Total losses from loss making businesses increased by

¥27.7 billion to ¥62.2 billion

Mitalco

¥14.5 billion

Impairment losses on plant facilities reflecting sharp rise in electric power

prices

MITSUI FOODS -

¥10.9

billion

Impairment losses on land & facilities as a result of reorganization of

distribution bases

Increase in interest expenses on Sakhalin II, up ¥6.7 billion

(before tax)

•

Reached agreements on responsive measures with all DPF users

•

Redeemed 98%

of DPFs

(as of May 8, 2006)

•

Completed compensation of all subsidies

•

Thorough training for employees; ‘Compliance Week’

introduced

•

Implementation of measures to prevent occurrence of similar incidents —

enhanced

whistle-blowing mechanism, revised disciplinary systems and applications

DPF

Incident

Measures for DPF users; subsidies compensation

Compliance: Awareness and System

Before tax

After tax

05/3

¥36.0 billion

¥22.0 billion

06/3

¥9.0 billion

¥5.0 billion

Financial Impact

Medium-term Management Outlook

Mitsui’s

business

and

financial

vision

3-5

years

ahead

Manage Our Business Portfolio to Create Value

Build a strategic business portfolio in order to create value

that meets the needs of customers and society

3 –

years ahead

06/3 07/3

Corporate Vision 3-5 Years Ahead

–

Quantitative Summary

300-400

202.4

240

Net Income

ROE

Net

DER

Total Assets

Shareholders’

Equity

14.5%

1.69

¥8.6

trillion

¥1.7 trillion

Approx. 1.5

12-15%

¥10-11

trillion

Free Cash Flow turns positive in 09/3

Net Interest-bearing

Debt

¥2.8 trillion

13.5%

1.58 X

¥9.3 trillion

¥1.9 trillion

¥3.0 trillion

(¥

billion)

-31.6

-31.0

112.4

144.0

76.0

31.5

38.0

13.0

14.1

Contributions by Business Area

3-5

years ahead

06/3 07/3

Categorize four functional business areas,

and develop strategies for each focused on their specific features

Net Income

(¥-billion)

300~400

202.4

240

07/3 & 08/3 investment plans

Approx. ¥

800 billion

Recycled investment

¥100-200 billion

Mineral Resources

& Energy

Global Marketing

Networks

Consumer Services

Infrastructure

400

50-100

150-200

150

Business Area

Investment (¥billion)

40~

90~

140

150

190

-45.9

-24.2

-30.0

11.5

18.8

33.3

33.1

28.9

25.2

45.5

60.1

43.3

66.9

83.5

-1.5

17.4

26.5

13.2

16.0

14.1

20.3

23.5

18.0

45.1

11.3

-1.7

-45.9

-24.2

-30.0

29.0

41.2

36.0

10.0

18.0

30.6

30.0

19.4

18.0

40.9

57.0

35.4

54.7

71.0

-6.9

12.1

20.0

11.8

13.4

11.8

17.5

20.9

11.6

42.8

10.0

10.6

-3.2

Year Ending March 2007: Net Income

(¥-billion)

121.1

202.4

240

121.1

202.4

240

05/3

06/3

07/3

05/3

06/3

07/3

Global Base

(by products)

Upstream Mineral

Resources

& Energy

approx. 50%

Non-resources

areas approx. 50%

•

Impairment

losses

Mitalco

and

MITSUI

FOODS,

and

DPF

charges

were

recorded

one-time

charges in 06/3

•

Commodity prices are expected to rise further in 07/3

•

Effective tax rate is expected to decline from 49% in 06/3 to 45% in 07/3

•

Increase in interest expense due to rise in US dollar interest rates and increasing investment

Foods & Retail

Chemical

Iron & Steel Raw Materials

and Non-Ferrous Metals

Energy

Iron & Steel Products

Machinery &

Infrastructure Projects

LS/CS/ Information,

Electronics and

Telecommunications

Logistics & Financial Markets

All other/ Adjustments

& Eliminations

Overseas

breakdown

07/3: Main Factors in Forecast Year-on-Year Changes

Sensitivity to Commodity Price Fluctuations and Other Risk Factors

•

Decline in commodity markets, rapid rise in yen, higher interest

rates,

07/3

06/3

Impact on Net Income

(Assumption)

(Actual)

(¥

billion)

Crude Oil/JCC (US$/bbl) 58

1.6 (US$1/bbl)

Iron Ore (US$/ton)

39(*)

2.7 (US$1/ton)

Coal (US$/ton)

110

125(**)

0.5 (US$1/ton)

Copper (US$/ton)

5,000

3,684(***)

0.25 (US$100/ton)

Forex

(¥/US$)

110

113.93

1.6 (¥1/US$)

Interest (Yen)

1.0 (Libor/0.1%)

(*)Representative iron ore price (fine) (**) Representative metallurgical coal price (***) Yearly average LME price

•

Changes in financial markets may cause adverse impact on our access to debt market or

our funding cost

•

Aggregation of environmental and resources issues may result in changes in industry

structure and demand structure

•

Country risks including changes in political and legal systems

•

Risks arising from schedule delays and operational problems at large scale projects

Reinforcement of Management Framework to Support Growth

and Inspire the Trust of Society

Key Initiatives

Thorough internal control and compliance

Promote management with a focus on CSR

Nurture and promote human

resources on a global basis

Dynamic allocation of business

resources

Promote strategic exits and asset

recycling

Accelerate development and deploy

human resources within the group

Development of Strategic

Business Portfolio

Implementation of

Global Strategy

Promote consumer

businesses

Initiatives in new energy

and environment areas

Strengthen strategic

development in Asia

Reinforce initiatives in Brazil

and Russia

Evolution to New Growth

Models Leveraging Business

Engineering Capabilities

Enhance Overall Group Portfolio Strategy

Promote strategic exits

Accelerate asset recycling

Refine investment evaluation criteria

Create a thorough awareness of groupwide

strategy

Enhance asset liquidity and

financial structure

resilient to changes

in economic environment

Create and re-engineer business portfolio

Optimize allocation of management resources (people + capital)

Portfolio

Management

Committee

Group Business Strategy

Mineral Resources and Energy Area

Completion and orderly start-up of large projects under

development including Sakhalin II and Enfield

Expansion of incumbent projects including LNG, Iron ore and

Coal production in Australia

Acquisition of new, quality projects in undeveloped areas etc

Development of bio-mass ethanol and new energy businesses

07/3 and 08/3

Planned Investment

¥400 billion

Net Income

150 ~190

3-5

years ahead

years

ahead

250

Our Equity

Share of Output

05/3

Oil/ Gas (bbl/d)

114

06/3

117

07/3

137

Iron Ore (Mtpy)

39.5

42.2

44.7

Coal (Mtpy)

8.2

6.7

7.6

(¥

billion)

112.4

144.0

06/3

07/3

Global Marketing Networks Area

•

Active

investment

enhance

and

integrate

logistics

network

and

SCM

functions

•

Focus on automobile, IT and energy industries through three regional headquarters including Asia

•

Development and deployment of human resources focused on areas of growth

Comprehensive

Strength

IT/FT/LT

SCM/DCM

functions

Global

Network

Iron and steel products, chemical products, automotive-related

businesses, etc. providing stable source of cash flow

07/3 and 08/3

Planned Investment

¥50-100 billion

90 ~140

Net Income

(¥

billion)

3-5

years ahead

76.0

06/3

07/3

Iron

Steel

Products:

transfer

SCM

model

developed

the

Asia

and

Europe

Chemical:

secure

Middle-East

supply

sources

methanol

and

others,

further

develop

logistics

infrastructure

etc.

Automotive-related: geographical expansion of retail financing and dealer businesses

Consumer Service Area

07/3 and 08/3

Planned Investment

¥150-200

billion

~50

(¥

billion)

•

Develop consumer service businesses —

seize growth opportunities as Japanese economy recovers

–

Lifestyle, Consumer Services and Information, Electronics and Telecommunication business units bundled

to form a unified segment

•

Create new businesses through convergence of telecommunications and broadcasting

•

Respond to social trends—rapid maturation in demography, health consciousness

•

Strengthen partnership and actively invest with 7&I, TBS, Duskin, Recruit, etc.

3-5

years ahead

Net Income

31.5

38.0

06/3

07/3

Medical/Health/Senior

Outsourcing

Media/Information

Retail Support

High Value-Added

Integrated Solutions

New Company

(BS digital

broadcasting)

14.1

13.0

06/3

07/3

Infrastructure Area

•

Create a long-term, stable earning base with less sensitivity to commodity price fluctuations

•

Selectively invest in quality assets in priority areas such as power generation and water supply

•

Leverage Mitsui’s business engineering capabilities to create value chains in mineral resources

and energy projects such as oil and gas

07/3 and 08/3

Planned Investment

¥150 billion

(¥

billion)

3-5

years ahead

Net Income

Malha

Gas Pipeline Project

Malha

Gas Pipeline Project

Ichihara

(Boomass)

Hibikinada

(Wind)

Wachtendonk

(Wind)

Ichihara

Hibikinada

Wachtendonk

ISAB

(Syngas)

Spanish Hydro

(Hydro)

Derwent

(Gas)

First Hydro

(Hydro)

Hub Power Company (HUBCO)

(Oil)

ISAB

Spanish Hydro

Derwent

First Hydro

Hub Power Company (HUBCO)

Umm Al Nar

IWPP

(Gas)

Paiton

(Gas)

Brazos

(Wind)

Umm Al Nar

IWPP

Paiton

Brazos

Eco Electrica

(Gas

/ LNG)

Kwinana

(Gas)

Loy Yang B

(Coal)

Loy Yang A

(Coal)

Tarong

North

(Coal)

GTF

(Oil)

Power

Other Infrastructure

Power

(IPM Eagle’s portfolio)

Railway Wagons Operating Lease

Gaspart

(local gas distribution)

Cabiunas

Gas Separation & Pipeline Project

Barracuda & Caratinga

Oil Fields

Development Project

EVM Oil Fields Development Project

Altamira

LNG Terminal

PEMEX Refinery Waste Water Treatment

Railway Wagons Operating Lease

Railway Locomotives Operating Lease

Saltend

(Gas)

Valladolid

(Gas)

Railway Wagons Operating Lease

Gaspart

(local gas distribution)

Cabiunas

Gas Separation & Pipeline Project

Barracuda & Caratinga

Development Project

EVM Oil Fields Development Project

Altamira

LNG Terminal

PEMEX Refinery Waste Water Treatment

Railway Wagons Operating Lease

Railway Locomotives Operating Lease

Saltend

Valladolid

Gulf Electric

(Gas)

Gulf Electric

Ontario

(Gas)

Reinforcement of Management Framework to Support Corporate Vision

•

Accelerate internal reallocation of human resources based on a review of our business

portfolio

•

Enhance management around three regional headquarters—Americas, Europe, Asia

•

Establish global corporate staff and integrated risk management frameworks

•

Enhance corporate governance: Increase external directors from two to three

•

Promote CSR-oriented management: Sustained commitment to performing quality work

3 –

years ahead

06/3 07/3

Compensation to Shareholders

300-400

202.4

240

Net Income

ROE

Net

DER

Total Assets

Shareholders’

Equity

14.5%

1.69

¥8.6

trillion

¥1.7 trillion

Approx. 1.5

12-15%

¥10-11

trillion

Net Interest-bearing Debt

¥2.8 trillion

13.5%

1.58 X

¥9.3 trillion

¥1.9 trillion

¥3.0 trillion

EPS

Dividend

Dividend Payout Ratio

¥126

¥24

(¥139)

(¥28)

Maintain Dividend Payout

Ratio at 20% until 08/3

Review of Compensation to Shareholders

(¥

billion)