Mitsubishi Motors Corp

Matsuoka-san, please. Please turn to page 3. Thank you for your participation in our FY24 full-year results meeting despite your busy schedule. In FY2024, we faced a challenging sales environment due to the delayed recovery in total of automotive demand in Thailand and Indonesia, as well as intensified competition resulting from the easing of global vehicle supply constraints. Despite these conditions, during the first half of the year, we were able to steadily increase our earnings, supported by favorable FX rates, even when fixed cost flows due to inflation. However, in the second half, the standard appreciation of tie bars, our cost currency, turned the exchange rate impact negative. Despite the challenging environment, we successfully translated increased unit sales driven by new models into solid earnings. In general, we implemented three cost and expenses reductions. As a result, we exceeded the full-year operating profit forecast that had been revised in Q3. Net sales remained on par with the previous year at 2,788.2 billion yen. Operating profit was 138.8 billion yen with the operating margin of 5%. Ordinary profit was 98.6 billion yen, and net income was 41 billion yen. Although retail sales volume fell slightly short of our revised forecast, it increased by 27,000 units year-over-year to 842,000 units. As initially forecasted, we will increase the annual dividend by 5 yen from the previous fiscal year to 15 yen per share. Please turn to page 4. In this slide, you can see the factors behind year-over-year changes in OP for FY2024. Volume mix and price and others contributed to a positive impact of 3.7 billion yen year-over-year. Within this, Volume mix had a negative impact of 9.3 billion yen, mainly due to a decline in wholesale volume in the Middle East, Africa, Europe, and Oceania and other regions. On the other hand, price and others contributed a positive impact of 13 billion yen driven by continued price improvements and favorable shifts in grade mix, particularly in Japan and North America. Service expenses had a negative impact of 45.3 billion yen year-over-year. While we partially offset the increase in incentive spending, mainly in North America, due to intensified competition by COVID advertising expenses, the overall impact remained significantly negative. Procurement costs and shipping costs had a negative impact of 2.6 billion yen, although we were largely able to offset the impact of inflation, increased shipping costs, and higher factory expenses. Through procurement cost reduction, the net effect was still a slight decline in profit. R&D expenses increased. increased as planned, resulting in a 12.1 billion yen decline in profit, and other items deteriorated by 8.8 billion yen due to higher personal costs, environmental related expenses, and effects impact on supplier procurement. However, this was more than 7 billion yen reduction from our initial forecast. The negative impact of the current cost currency Thai baht was offset by the U.S. dollars and other currencies, resulting in a favorable effect of 12.9 billion yen year-over-year. Please turn to page 5. This slide explains the factors behind the year-over-year change in OP for the FY2024 Q4 alone. After Q3, volume mix and price had been a cumulative negative factor of 16 billion yen, but this trend shifted significantly in Q4. Thanks to increased sales of higher margin models, particularly newly launched vehicles, the year-over-year impact turned positive by ¥18.7 billion. Sales expenses deteriorated by ¥7.1 billion mainly due to an increase in incentives in response to intensified competition in markets such as North America and Oceania. Procurement cost and shipping cost worsened by 7.2 billion yen due to the concentration of cost settlements in Q4, reflecting material cost increase caused by inflation. R&D expenses resulted in 1.1 billion yen negative impact. Other expenses contributed a positive impact of 4.4 billion yen, reflecting smooth progress in cost reduction initiatives. As for foreign currencies, While we were able to partially offset the negative impact of the appreciation of Thai bahts by U.S. dollars and other currencies, the net effect was 4.4 billion yen negative impact. Please turn to page 6. I'd like to explain our global retail sales volume for FY24. Despite the challenging market environment, we focused on expanding market share in our core markets by refreshing our models. accelerating electrification and strengthening our sales network. As a result, although we slightly fell short of our revised forecast, retail sales increased year-over-year in regions such as ASEAN, Japan, and North America. In Europe, total demand declined due to deteriorating economic sentiment in major countries and increased uncertainties stemming from political instability leading to a decline in retail sales. In China and others, States were halved year over year as a result of a drastic structural reform implemented in FY2023. Next, our CEO, Mr. Carter, will explain our plan and key initiatives for FY2025. Kato-san, please. Please turn to page 8. Due to the international economic turmoil triggered by US tariff policies, global economic uncertainties have increased in 2025. As shown in this slide, our financial forecast for FY2025 is as follows. Net sales of 2.95 trillion yen, operating profit of 100 billion yen, ordinary profit of 90 billion yen, and net income of 40 billion yen. This guidance reflects the anticipated impact of U.S. tariffs as of the current point of time. Given the current uncertainty in the global economy, we will provide a timely update to our earnings forecast on a quarterly basis throughout the year. Regarding dividends per share, we plan to issue a dividend of 10 per share for FY2025 at this moment. Although the impact of U.S. tariffs remains difficult to gauge, we will strive to maintain an annual dividend of at least 10 Yen regardless of the circumstances, while continuing to execute concrete measures to support future earnings recovery. We sincerely ask for the continued understanding and support of our shareholders.

Please turn to page 9.

This slide shows the factors behind the transition in the appearing profit forecast for FY2025 from the previous year. We expect a positive impact of 73.5 billion yen from volume mix and price, and so on. Although the overall economic environment remains challenging, we expect the full-year contribution of new models launched at the end of last fiscal year, along with the impact of new models scheduled for launch this year, to support profit growth in ASEAN, Oceania, Europe, and Japan. Shipping expenses are expected to have a negative impact of 13 billion yen, while we anticipate an increase in incentive costs. Due to intensified competition, we plan to partially offset those three more efficient and restrained advertising expenditures. Regarding procurement and shipping costs, although we expect upward pressure from enhanced product competitiveness and inflationary factors, we aim to largely offset these three procurement cost reduction activities. However, a slight negative impact is still anticipated. R&D expenses are expected to improve slightly year over year. Others include expected increase in environmental compliance costs, which will be partially offset by reductions in general and administrative expenses, resulting in a total negative impact of 6.1 billion yen. Regarding the impact of exchange rate, we expect a negative impact of 51 billion yen, assuming a modest yen appreciation compared to the previous year. Regarding the impact of U.S. tariffs, we have estimated the impact based on assumed economic slowdown in the U.S. and regions with high dependencies on the U.S. market. We anticipate a decline in wholesale volume. However, through cost-cutting measures, we expect to absorb parts of this impact, estimating the net effect at 40 billion yen. Given the heightened risks of economic downturn in FY2025, we will work toward achieving an operating profit of 100 billion yen by thoroughly reducing costs and expenses. Please turn to page 10. This slide presents our regional sales volume forecast for FY2025. We aim to maintain and expand both market share and sales volume in ASEAN, Latin America, Middle East, Japan, and Europe through the refreshing of existing models and the introduction of new models. Next, we will explain the key initiatives to achieve the forecast. Please turn to page two. First, the ASEAN and Oceania regions that are the growth drivers for us. In FY2025, the overall sales environment in ASEAN countries is expected to remain challenging. In Thailand, household debt remains at a high level, and the recovery in the macroeconomy is not anticipated. In Indonesia, concerns are rising over economic stagnation due to tax increase and redistribution. policies under the new administration. Vietnam and Malaysia may be affected by reciprocal tariffs involving the United States. On the other hand, the Philippines is expected to maintain a robust market environment. Amid these conditions, we aim to expand sales volume by leveraging the launch of new models, improving our sales network, and collaborating with local financial institutions. At the same time, we will pursue profit growth through rigorous cost and expense reductions. In the Oceania region, the business environment is expected to remain challenging in FY2025. This is due to Australia's economic downturn resulting from persistently high policy interest rates and the sluggish Chinese economy, Australia's key export destination. Under these circumstances, we will prioritize maintaining a market share by strengthening sales of the all-new Triton, now available in all grades in the new Outlander series. Please turn to page 13. Next is Latin America, Middle East, Africa, and that are the leveraged regions. In the Latin America region, automotive demand in Brazil, which is a core market, is expected to slow due to persistently high policy interest rate. However, leveraging our strong brand presence in Brazil, we aim to sustainable growth by continuously introducing new models and strengthening private use, sales of higher end grade of the new Triton. In the Middle East, The sales environment surrounding us is not expected to change significantly in FY2025, and we anticipate conditions to remain roughly in line with the previous year. We will continue to focus on our core models, the Outlander and the Montero Sport, while promoting deeper market penetration of new L200 Triton launched last year. With a robust model lineup now in place, We will enhance our brand and sales performance through market-appropriate pricing strategies and effective advertising campaigns. Please turn to page 14.