Mitsubishi Heavy Industries, Ltd.

Hello. Allow me to provide an overview of our Q123-FI2024 financial results using these presentation materials. Since the materials have been released in advance, I will omit a detailed explanation and focus on the key takeaways while providing some additional details. The materials are organized according to the table of contents on slide 2. First, I would like to provide an overview of the financial results. Please refer to slide four and slide five. This slide shows the results in several key financial indicators and highlights of the results. Overall performance during Q3 was strong, which continued the trend from Q2. Order intake from last year. from FY2022 and FY2023 has increased significantly. This year exceeded even those high levels. So the increase of the order intake last year was in defense, which was the main driver of order growth in FY2023. Order intake in GTCC, aero engines, and metal machinery increased significantly while defense decreased. As we expect to book even more orders from now through the end of the fiscal year, we have raised our full-year forecast from 6 trillion yen to 6.4 trillion yen. Revenue increased in all segments, and both business profit and net income increased year on year. Based on our year-to-date performance, we have revised our full-year guidance for all major financial indicators. Moreover, order intake revenue and non-profit items sold record highs for a Q123 period. Slide 6 and beyond provide a little more detail on our financial results. Slide 7 includes information already provided, so I will forego an explanation. Slide 8 shows the balance sheet and cash flows. Total assets increased by 568.9 billion yen on the last year's end to 6,825.2 billion yen. Because the yen depreciated at the end of December 2024 compared to the rate at the end of March 2024, the impact of currency translation effects related to foreign currency denominated assets served to increase assets by 90 billion yen. Excluding this impact, normalized total assets increased by 480 billion yen. allow me to provide a breakdown of the increase in assets excluding foreign exchange effects. Trade receivables increased by around 150 billion yen, inventories by around 180 billion yen, and cash and cash equivalents by around 100 billion yen. This kind of increase in trade receivables and inventories is typical for image value, and we assess this is to be within the range of normal fluctuations considering that revenue is currently growing. Regarding cash flows, operating cash flow greatly improved, partly due to an increase in profit, as well as successful control of the year-on-year increase in operating capital. Considering the strong progress we have made versus a full-year plan, we have increased our free cash flow forecast from negative 100 billion yen to zero. Slide 9 shows factors which cause year-on-year changes in business profits. The leftmost bar shows Q123 FY2023 business profit, which was 191.6 billion yen. Although there were some negative factors in Q123 FY2024, including the impact of wage increases, there were also many solidly positive factors. Revenue growth in many businesses, the effects of improved product mix and profit margins, as well as the depreciation of the yen in terms of the Q123 average exchange rate Served to increase business profit to 264.7 billion. In Q123, FY2024, moreover, this time we have included a new item called losses from equity method SPC investments. This refers to a portion of 1 time expenses book during Q3 at 2 power plant operating companies, which are outlined on slide 15. Allow me to provide some more details about the changes in one time expenses. So, this is as shown as 30 billion yen. During Q1 to Q3 of 2023, we booked around 40 billion yen in one time expenses from the PW1100G engine program, as well as from unexpected claims related to some international projects. There were no large losses through the first half of this fiscal year. But unfortunately, as we are forecasting additional expenses in some international projects, we booked around 10 billion losses in Q3. The difference between the rebound of 40B in expenses from the previous fiscal year and the 10B in losses booked this fiscal year resulted in the positive 30B shown on this year. So, basically, we said that during this year we have a 20B buffer, but this 10B was used at this timing. Slide 10 shows a summary of order intake, revenue, and business profit by segment. Over the next slides, I will explain the situation in each segment. Please note that due to the establishment of DEX solutions in April 2024, we have made some adjustments to our reporting segments. The Q123 FY2023 figures shown here have been retroactively adjusted to reflect these changes.

This slide 11 shows the situation in the energy system segment. Order intake, revenue, and profit all increased year on year, marking strong progress toward the full-year guidance. In particular, strong order intake in GTCC continued due to booming demand in the gas turbine market. Considering the strong performance versus the plan made in each of the major businesses in this segment, we have increased our full-year order intake, revenue, and business profit forecasts. Slide 12 shows the situation in the plant and infrastructure system segment. In the segment as well, order intake revenue and profit all increased year on year, marking strong progress toward the full year guidance. The booking of some large projects in metals machinery, waste energy systems, and machinery systems contributed to large year on year growth in order intake. In particular, order intake and mid-nose machinery has outperformed initial projections. Based on this situation, we have increased this segment's full-year order intake forecast by ¥100 billion and the profit forecast by ¥10 billion. Slide 13 shows the situation in the logistics, thermal, and drive system segment, or LTND. Segment totals for order intake and revenue were slightly higher year-on-year, but when excluding foreign exchange effects, normalized revenue was down. Profit decreased in turbochargers due to the impact of production disruptions caused by issues at the supplier. Both revenue and profit were down in logistics systems due to a decline in units sold outside Japan. Slide 14 shows the situation in the aircraft defense and space segment. Although order intake decreased year-on-year due to the booking of several large defense projects in Q1 through Q3, FY2023 orders were still high compared to past levels and performance was strong versus the full-year forecast. Revenue exceeded our plan due to steady progress on the execution of our large order backlog. Profit continued to increase due to the impact of revenue growth as well as yen depreciation. Based on year-to-date performance, we have increased our full-year revenue forecast by 50 billion yen and our profit forecast by 20 billion yen in this segment. Slide 15 outlines an important topic for Q3. This is regarding our Nakoso and Hirano power plant operation businesses, which we are working on as part of the Fukushima revitalization project. These two projects, in addition to building two power plants, we also had a 40% stake in the SBCs or special project companies that operate the power plants. In Q3, we decided to acquire the equity links from two other companies in order to move forward with optimizations to plant operations. These plants are attempting to utilize a scaled-up version of a new technology called Integrated Coal Gasification Combined Cycle, or IGCC. The plants have experienced several technical issues, but we recently completed a series of repair work and confirmed the efficacy of those improvements. We believe that by increasing MHI's involvement in the project overall, we will be able to further improve plant reliability. Slides 17 through 20 show the FY2024 earnings forecast. At this time, we have revised our full year forecast in terms of order intake, revenue, business profit, net income, and free cash flow. I have already explained the details of the revision, so please allow me to emit an explanation. This concludes my explanation. Thank you for your attention.