Mitsubishi Heavy Industries, Ltd.

Thank you for joining us today. Allow me to walk through one through three of our 2025 financial results and the four-year earnings forecast. Please note that I will not read the materials word for word. I instead will focus upon some takeaways while providing some supplementary information to provide the overviews. First of all, with slide four, which shows the result in our KPI. Order intake was 5,029.1 billion yen. This is an increase of 13% YOY and a record cumulative high through Q3. Looking at the individual segments, order intake increased significantly in energy systems, particularly in GTCC. Although not shown on slide 4, our order backlog exceeded 12 trillion yen, an increase of approximately 2 trillion yen from the end of the previous fiscal year. Revenue increased 9% to 3,329.2%. 26.9 billion yen. Business profit increased 26% to 301.2 billion yen and was up YOY in all segments except energy, which booked some one-time expenses in Q2. Net income increased 23% to 210.9 billion yen, which was also a record high through Q3. Top right side, free cash flow was positive 167.6 billion yen. Left bottom, the interest-bearing debt decreased to 573.9 billion yen. Please refer to the table near the bottom of page 7. 167.6 billion yen in free cash flow included 256.7 billion yen in operating cash flow. This is mainly due to the increased profit as well as effort to secure advanced payments in GTCC against the backdrop of strong demand for gas turbines. Slide 8 shows the balance sheet. Please note that assets and the liabilities related to Mitsubishi Lotus Next are included in assets and liabilities held for sales. Total assets were 7,393 billion yen up 734.1 billion yen from the end of the previous fiscal year, excluding an impact of 240 billion yen from foreign currency rate fluctuations The increase was 490 billion yen. Mitsubishi's next slide, the reclassification of the ML items make the balance sheet a little difficult to pause. But excluding this classification, the asset side of working capital increased by about 350 billion on the liability side. GTCC's booking of the advance received and increased by about 300 billion, so the net is some billions of yen increased by about 60 billion yen. The balance of interest-bearing debt was 573.9 billion yen, and the net interest-bearing debt was negative 112.7 billion yen. Slide 9 shows a waterfall chart illustrating YOY changes in business profit. Changes in the revenue and margin improvements serve to increase business profits by 110 billion yen, starting from 240 billion. By looking at the improvements, we do see the increase by 110 billion yen. We see this as a result of the city execution of our extensive backlog and the provision of after-sales services in each segment. At the beginning of the fiscal year, we had planned for this factor to add $130 billion in YOY to business profit in the full year, and the progress we have seen through Q3 gives us confidence in this figure. The negative 20 billion yen from the changes in one-time expenses represent the difference between the negative 10 billion yen booked in the previous fiscal year and the negative 30 billion yen recorded in Q2 of the current fiscal year. The both expenses were all from the projects in the thermal power businesses. On the topic of foreign exchange rates, the average rate for the revenue recognition was 152 yen to a dollar during the previous fiscal year. and 148 yen to a dollar in the current fiscal year, so that yen was appreciated slightly. The updates on each segment were shown on the slide and afterwards.

Spending energy systems order intake increased significantly in GTCC nuclear power. Orders for GTCC were driven by strong demand for electricity in North America, Asia, and Japan. Although profit increased as we steadily executed projects and provided after-sales services, profit for the segment, as I said, as a whole decreased due to the booking of 30 billion yen in one-time expenses in steam power. On the top left of the slide, we show you the full-year outlook. On the back of strong water intake in GTCC, nuclear power, and steam power, we have increased the full-year water intake forecast from 3.2 trillion yen to 3.6 trillion yen. Next, going to slide 12. This is plants and infrastructure systems. Order intake, revenue, and business profit all increased year over year, although orders for metal machinery and machinery systems declined due to a high base effect from large projects booked in the previous fiscal year. Overall order intake increased mainly due to the signing of a contract for a fertilizer plant in Turkmenistan in the engineering business. Business profit increased significantly due to steady progress in metals machinery projects and improved portability in machinery systems and commercial ships. We have increased the full-year order intake forecast from 900 billion yen to 1.1 trillion yen. This reflects the booking of the large fertilizer plant. We have also increased the forecast for business profit from 70 billion yen to 80 billion yen based on steady progress in engineering and metals machinery. Slide 13. In logistics, thermal, and drive systems, HVAC units sold continued to decline due to stagnation in the China real estate market. Revenue increased in engines reflecting strong demand for data centers while total segment revenue decreased. Higher business profit in engines and turbochargers offset declines in HVAC, resulting in an increase in overall segment business profit. Slide 14. In aircraft defense and space, order intake declined in defense due to a high base effect from the booking of several large projects in the previous fiscal year. However, revenue and business profit increased due to steady execution of the backlog. The revenue and business profit also increased in commercial aviation due to an increase in the number of Boeing 787 unit deliveries and various profitability improvement initiatives. Next, allow me to speak about the full-year earnings forecast. This is slide 16. We have increased the full-year order intake forecast by 600 billion yen to 6.7 trillion yen. We raised the business profit forecast by 20 billion yen to 410 billion yen, and the new target for net income is 260 billion yen. The exchange rate assumption for the fourth quarter is 150 yen to the dollar, and for an exchange exposure on a business profit basis is 900 million dollars. In terms of free cash flow, we have changed the target to 200 billion yen. From page 17 to page 20 is the buy segment, order intake, revenue, and profit. This will be repetitive, so please read this after today's briefing. So from 21-year onwards, we have some additional information. Page 22, this is the number of gas turbines order intake, number of order intakes. Up to the third quarter, we have 31 units. The backlog is 75 units. Going to page 23. On the top left, the bi-segment order backlog is shown. Energy systems, 6.5 trillion yen, out of which DTCC is about 5 trillion yen. Plants and infrastructure systems at 2 trillion yen. Aircraft differences in space is around 3.5 trillion yen. So, I have gone through my presentation. To summarize, the results in the third quarter continue to see strong trends as And going forward, we will continue to previous releases. We have seen progress in winning new orders, which is a source of future profit growth. We are steadily converting a sizable backlog into higher profits. We will additionally team in each of our businesses with the aim of achieving our midterm target for 2024. This concludes my presentation.