Mitsubishi Heavy Industries, Ltd.

Good afternoon, everybody. I am President and CEO, Izumisawa.

Thank you very much for participating in our financial results as well as 2021 MTBP progress report. We are in the midst of COVID-19, and that we are holding this conference in the remote mechanism.

As mentioned by Mr. Inoue, Mr.

Kozawa, our CFO, will be talking about FY '20 performance results as well as forecast for FY '21. Then afterwards, I will take the microphone, and I will talk about the progress of 2021 MTBP, which was announced last October.

Regarding fiscal year 2020, regarding the revenue as well as profit attributable to the owners of the parent, and we were able to achieve the forecast. For 2021, MTBP, so we are going to focus on the growth, and regarding the energy, we are going to talk about what is the undertaking that we are taking regarding the development growth areas as well as strengthening profitability.

Thank you very much for your introduction. My name is Hisato Kozawa.

We have already released the materials so I will just highlight the main points and supplement some further explanation. Please take a look at Slide 4 and 5.

This is the overview of the performance results. And if you can kindly look at that one together, I will appreciate it.

Order intake and revenue were decreased year-on-year, but are in line with our budget. Nuclear power and Defense & Space were robust throughout the year.

Logistics, Thermal and Drive Systems continue to recover after bottoming out in Q1. Regarding the impact of COVID-19, Logistics, Thermal and Drive Systems continued to recover since Q2.

And in Q4, it was flat year-on-year. Meanwhile, negative impact is still left in some BTO business such as plants as well as commercial aircraft.

Details will be given in Slide 13. About our profit for business activities and profit attributable to owners of parent achieved our forecast.

Business profit was up on year-on-year, while profit attributable to owners of parent was down year-on-year due to the repercussion posting DTA for the past losses incurred in Space Jet business before FY '18 and FY '19. Slide 6 and 7 show our financial position.

Our management is focused on cash flow, and we have been working to optimize our assets. In FY '20, we restructured offshore wind power JV with Vestas of Denmark and made MHPS 100% subsidiary and optimized our portfolio management.

As a result, total asset decreased by ¥174.9 billion. Details will come later.

But please note that due to the improvement of free cash flow, interest bearing debt was below our target. And given the bullish market, valuation improved and equity ratio landed at 28.4%, a major improvement year-on-year.

Slide 8, cash flow. In FY '20, there was an outflow of advance payment from the past, which was further aggravated by a decrease in revenue due to the pandemic.

Thus, free cash flow was negative ¥277.1 billion. However, by improving the payment, T&C of each project, an improvement of ¥120 billion against the forecast was achieved.

Slide 9, order intake and backlog by segment. For your reference, please note that Slide 58 shows the details.

Each segment's order intake decreased year-on-year. Some businesses such as Aircraft and Logistics, Thermal and Drive Systems were directly hit by the market contraction caused by COVID-19, while our plant project negotiations have been postponed.

Page 10 revenues. Energy and Aircraft Defense and Space were flat year-on-year.

While Plants and Infrastructure Systems and Logistics, Thermal and Drive Systems were down year-on-year. Slide 11, business profit by segment.

Only Air Defense and Space system increased year-on-year succeeding in reducing loss, while in Commercial Aircraft Limited, we were able to dramatically reduce base debt loss.

Now this is Izumisawa again. I would like to walk you through the progress of 2021, MTBP.

Page 21. This is the mission of MHI, we integrate cutting-edge technology into expertise built up over many years to provide solutions to the world's most pressing issues and provide better lives.

Please turn to Page 22. In '21 MTBP, we focused on growth areas and strengthen profitability.

As you can see, growth, profitability, dividends and financial stability are 4 KPIs that we uphold to pursue our plan. Please turn to Page 23.

Firstly, how are we going to work on growth. By '23, we want to have the revenue of ¥100 billion, and by FY '30, we want to increase revenue to a level of ¥1 trillion.

Please turn to Page 24 and 25. This shows the acceleration of decarbonization initiatives.

You see Japan, U.S., China, EU and U.K. situation for 2030 GHG emissions, there are targets already defined.