Mitsubishi Heavy Industries, Ltd.

Good afternoon, everyone. Nice to meet you today. Let me start my presentation. The table of contents is shown on slide two. Let me offer you key takeaways. Please refer to page four. This page shows the measure KPI results. Highlights are shown on slide five. For the first quarter, We progressed as per the plan in general. Order intake, revenue, profit, all of them exceeded the previous year's level. Especially order intake grew significantly. Progress against the full year forecast is approximately 35%, which is quite high. This is due to the fact that we've received a large defense-related order at the beginning of the year. Our defense business order is normally skewed toward the end of the year. However, this year was exceptional. Business profit, the net income, both of them have grown quite significantly from the same period last year, mainly thanks to the price optimization effort since last year, revenue growth, and weaker yen. This will be detailed later on in slide 9. Trade cash flow is almost the same level as the last year. Slide 6 and onward gives you details of the financial results. Slide 7 is rather repetitive, so let me skip. Slide 8 shows balance sheet and cash flow. Total asset is 5.6559 trillion yen, up by 181.1 billion yen from the end of 2022. This increase has been driven by the impact of foreign-denominated asset translation due to Ukraine. The impact was approximately 150 billion yen. Inventories also slightly increased, but this is within the normal range. As for the cash flow, investing cash flow improved year on year and became positive. This is due to the sale of real estate and securities. Slide 9 explains profit bridge from the same period last year. The bar graph on your left shows the business profit of Q1 2022, which was 14.9 billion yen. Folklift and HVAC. Last year, the same period had negative impacts from the cost increase, but this year, magnitude of cost increase since last year has been suppressed. We had a cost optimization, which is the impact of the price increase. It exceeded the cost increase impact and the profit went up by 14 billion yen. Decreases in the one-time expenses in the thermal power business piece, we no longer have a loss associated with European business structure reform unlike last year. And we have the other factors, and business profit was 51.9 billion yen.

Slide 10 shows a summary of orders, revenue, and profit from business activities by segment. Now let me explain the results of each segment. Slide 11 shows the results of the energy segment. Orders, revenues, and business profits also are positive against the four-year forecast. Especially, orders intake for GTCC continue to be strong from the previous year. Although order intake and sales of steam powers are down year-on-year, this was expected under the current environment, and the fact that we were able to make up that difference in other businesses is a good sign. Steam power increases profit. mainly because it no longer has a restructuring cost of a European site from the previous fiscal year. Slide 12 shows the plant and infrastructure segment. This segment also had a good start in terms of order intake, sales, revenues, and profits compared to the full-year forecast. Orders are down here and there, but this was mainly due to the metals machinery business as indicated in the table. Of course, this 108.2 billion yen in the current quarter is also a high enough level, and the market continues to be strong. Slide 13 shows the status of logistic, thermal, and drive systems. Orders, revenues, and business profits are all roughly 25% due to our four-year forecast, so mostly in line with our plan. Price optimization efforts since the latter half of the last year is contributing fully, which is a positive sign. On the other hand, although the availability of electronic components is improving, it's still unstable, and we are closely monitoring the situation. Slide 14 shows airspace, defense, and space. As I mentioned earlier, log orders received from the defense sector contributed to the segment's total orders of 687.1 billion. As shown in this graph, orders received in the first quarter alone were equivalent to those of the entire last year. In the commercial aircraft Tier 1 business, both sales and income profit increase year-on-year due to increase in the number of 787 ships from the Boeing and the benefits of the weaker EM. Slide 15 to 17 shows our earning forecast for FY2023. Since there's no change from what we announced in May, I will omit the description of the contents. That's all for my presentation. Thank you very much.