Mitsubishi Logisnext Co., Ltd.
Financial Results Briefing for the Fiscal Year Ended March 2022
May 25, 2022

Event Summary[Company Name]

Mitsubishi Logisnext Co., Ltd.

[Company ID]

7105-QCODE[Event Language]

JPN[Event Type]Earnings Announcement[Event Name]

Financial Results Briefing for the Fiscal Year Ended March 2022

[Fiscal Period]

FY2021 Annual[Date]

May 25, 2022

[Number of Pages]

37[Time]

15:30 – 16:29(Total: 59 minutes, Presentation: 45 minutes, Q&A: 14 minutes)[Venue]Webcast[Participants][Number of Speakers]

4
Takashi Mikogami
Takashi Kubo
Yuichi Mano

Takatoshi Uno

Representative Director and Chairman
Representative Director and President
Senior Executive Officer, Division Head,General Manager, Corporate Strategy andPlanning Office
Executive Officer, CFO, Head of Corporate
Finance and Accounting Headquarters

Presentation
Moderator: Thank you for waiting. The time has arrived, so we will begin Mitsubishi Logisnext Co., Ltd.’sfinancial results for the fiscal year ended March 2022.
Thank you very much for participating in our financial results briefing today despite your busy schedule.
Today, we would like to present an overview of the financial results for the fiscal year ended March 2022, as
well as the management policy for FY2022 and the progress of the medium-term management plan.
I would like to introduce today’s speakers from the Company. Takashi Mikogami, Representative Director andChairman.
Mikogami: I am Mikogami. Thank you.
Moderator: Takashi Kubo, Representative Director and President.
Kubo: I’m Kubo. Thank you.
Moderator: Yuichi Mano, Senior Executive Officer, Division Head, General Manager, Corporate Strategy andPlanning Office.
Mano: I’m Mano. Thank you.
Moderator: Takatoshi Uno, Executive Officer, CFO, Head of Corporate Finance and Accounting Headquarters.
Uno: I’m Uno. Thank you.
Moderator: That’s all.
As for today’s proceedings, Uno, CFO, Head of Corporate Finance and Accounting Headquarters, will provide
an overview of the financial results for the fiscal year ended March 2022, and Kubo, Representative Director
and President, will explain the management policy for FY2022 and the progress of the medium-term
management plan.
The presentation will last approximately 45 minutes, until approximately 4:15 PM. A 15-minute question andanswer session will follow. I’ll tell you how to ask questions later. Today’s financial results briefing is scheduled
to finish at 4:30 PM.
Today’s presentation materials will be based on the presentation slides for the financial results meeting, which
are available from the URL that we have provided to you by e-mail in advance.
We will now move on to the financial results for the fiscal year ended March 2022.
Mr. Uno, Head of Corporate Finance and Accounting Headquarters, please begin.

Uno: Okay, I’m Uno of Mitsubishi Logisnext. Thank you very much for participating in our financial results
briefing for the fiscal year ended March 2022.
I would like to begin with an overview of the financial results.
Let’s start with the page three of the document.
The market environment surrounding our company differs from region to region and country to country, both
domestic and overseas, but all are showing recovery from the COVID-19 crisis. In particular, the recovery inEurope, the United States, and Asia has been very strong, and has recovered to levels exceeding those before
the COVID-19 crisis.
On the other hand, the effects of rising material and transportation costs, supply constraints, and supply chain
disruptions had a significant impact throughout the year. Products cannot be made as planned due toshortages of production parts and materials and delays in transportation. Like other manufacturers, we arealso under pressure to deal with the situation where costs are rising even if we can produce the product.
This is a summary of our consolidated financial results under these circumstances.
Net sales increased by 18.9%, thanks to the recovery and resumption of demand for forklifts, but not as muchas the growth in orders. Operating income before amortization of goodwill and other items increased by
18.4%. After amortization of goodwill and other items, operating income under the system accounting
increased by 125.3% YoY.

Please see the financial highlights on page four.
Once again, I will explain the key financial values. For the fiscal year ended March 2022, net sales were
JPY465.4 billion, operating income before amortization of goodwill and other items was JPY13 billion, andoperating income after amortization of goodwill and other items was JPY3.6 billion. While net sales were atan all-time high, operating income fell short of FY2018.
Below the table on page four are pictorial representations of sales and the ratio of operating income before
amortization of goodwill and other items for the past five fiscal years. Here, please refer to this page.
As for operating income, I would like to briefly introduce the transition in the short term, that is, every threemonths. For the fourth quarter of FY2021, net sales were JPY128.6 billion, the largest ever for a three-month
period, while operating income was lower than in the fourth quarter of the previous fiscal year.
The impact of rising material and transportation costs is becoming more severe with each passing day, andwe hope you can understand why record sales did not translate into operating income. You will see this point
again today on page 13 of the document as we look at the figures.
Returning to the explanation of the full-year results, there were no non-operating income/loss items orextraordinary income or loss items that are worthy of special mention.
As a result, net income for the period, or final profit was positive JPY720 million. This is the first time in threefiscal years that the Company has posted a profit since it posted a net loss for two consecutive fiscal years in
the fiscal year ended March 2021.

On page five and page six, I will explain the situation by segment and by region.
From this page onward, we will refer to operating income before amortization of goodwill, etc. as operating
income. We appreciate your understanding.
Page five shows the results by segment.
This shows a breakdown of net sales and operating income by segment. As shown in the upper graph, net
sales increased by 18.9%, but while domestic sales rose by JPY5.5 billion, or 3.2%, overseas sales increased by
JPY68.4 billion, or 30.7%, showing a remarkable recovery in overseas markets.
Operating income in the lower row, the increase is 18.4%. The domestic business increased profit by 12.3%
and the overseas business increased profit by 24.9%, and the growth in the overseas business still exceeds
the growth in the domestic business. However, the reason why the growth rate was not as large as that of net
sales was that overseas sales were more significantly affected by the sharp rise in material and transportation
costs.

Page six shows YoY sales by region, with the first half shown in blue and the second half in beige.
As you can see, sales in the Americas, Europe, and Asia and China increased significantly, but here I would liketo introduce the rate of increase in sales from the first half to the second half in each region. Sales increased
by 23.2% in the Americas, from the first half to the second half of the year. In Europe, we achieved an 18.6%
increase in sales from the first half to the second half of the year.
Against the backdrop of strong demand and favorable orders, we have prepared a system to increase
production in the second half of the year, and this has been effective. However, as we have mentioned earlier,due to supply chain disruptions and supply constraints, production and shipments were not as initially planned.
We recognize that this is an important issue in this progressive period.

Page seven. This waterfall chart shows the factors that contribute to sales increase or decrease by region,
excluding foreign exchange effects.
As indicated in the text at the top of the chart, we were unfortunately unable to achieve our earnings forecastof JPY470 billion due to the fact that we were unable to increase sales as much as market recovery in all
overseas regions and orders received. Sales were JPY465.4 billion.
The leftmost column of the waterfall chart shows the impact of foreign exchange rates, which contributed
JPY15.6 billion to the overall increase in sales. I would like to give you a brief breakdown by region: JPY10.1
billion in the Americas, JPY4.6 billion in Europe, and JPY900 million in Asia and China. The impact of the yen’s
depreciation against the US dollar and euro was a major factor contributing to the foreign exchange impact
on net sales.

Page eight. I would like to move on to the sheet of factors for changes in consolidated operating income.
Page eight shows the increase in operating income by factor. As you can see on page seven, sales growth was
JPY73.9 billion. This JPY73.9 billion increase in sales was accompanied by an increase in gross profit of JPY22.04
billion. In contrast, variable costs deteriorated significantly due to soaring material and transportation costs,
although there was a limited contribution of JPY2.58 billion to the selling price.
As for the increase in expenses, the yellow arrows indicate that the final result was an increase of only JPY2
billion YoY, due in part to an increase in expenses associated with an increase in the volume of corporate
activities. Although not shown in the graph, the increase in operating income in the first half of the year
compared to the previous year was just under JPY2 billion. In the second half of the year, although the YoY
increase in revenue, profit remained flat.
I have just introduced the figure of JPY2.58 billion in sales price improvement in this explanation. I would liketo offer a supplemental explanation for the small contribution to the rising cost of materials andtransportation. In response to such major cost deterioration, we are raising prices to our customers in both
domestic and overseas regions.
In the Americas and Europe, where cost deterioration has had a particularly large impact, we raised prices
multiple times in line with cost increases during the period. However, under the production constraints, wewere not able to expand production and shipments and increase production as planned. Orders received after
the initial price increase accumulated as a backlog, and we were unable to produce and ship the relatively
recent orders received at a price commensurate with the current cost level during the period.

This led to a limited amount of sales price improvement effect. This means that there is a situation in which
the effect of sales price improvement is delayed.

On page nine and page 10, I would like to briefly explain the balance sheet and cash flow.
Page nine is the consolidated balance sheet.
Amid the increase in sales and further supply chain disruptions, inventories increased by JPY35.5 billion fromthe end of the previous fiscal year, mainly at manufacturing sites. In assets, although amortization of goodwill
assets progressed, there was also an increase in the conversion of assets of overseas bases due to the weaker
yen, resulting in an increase in total assets of JPY42.2 billion.
The capital adequacy ratio, which is a key issue for the Company, improved slightly from 15.1% at the end of
the fiscal year ended March 2021. At the end of the fiscal year ended March 2022, the ratio was 15.6%.

Next, on page 10, the status of cash flow.
Cash flow from sales activities decreased by JPY12.9 billion YoY. As we have just explained in the balance sheet,this is mainly due to the increase in inventories, which deteriorated working capital.
Also, as for cash flow from investing activities, the economic recovery in Europe and the US, as well as the
economic and social activities, have led to a very large recovery in demand for lease and rental equipment,
and the number of investments in forklift trucks for lease and rental equipment has increased.
As a result, free cash flow totaled JPY1.4 billion, down JPY9.6 billion from JPY11 billion in the previous year.
Supply chain disruptions, i.e., shortages of production parts, container shortages, and transportation delays
due to port and loading and unloading congestion, have led to large inventory buildups, especially in
manufacturing facilities, and reduced free cash flow. During the current fiscal year, the Company aims toachieve normalization of production and shipments and to restore cash flow.

Page 11 shows various financial indicators, including ROA, as reference material and main management
indicators.
Profitability and safety indicators improved from the previous year, they still remain at low levels, and we willcontinue to strive for improvement.

Page 12 shows trends in capital expenditures and R&D expenditures for your reference.
Capital investment and recurring investment are generally at the same level as in the past, as shown here inblue. As I explained earlier in the cash flow situation, investment in leases and rentals in the yellow section
has increased significantly from the fiscal year ended March 2021 to the fiscal year ended March 2022, andwe are planning to maintain the same level of investment in the fiscal year ended March 2023.
As for R&D investment, we are gradually increasing R&D expenses for future growth, while maintaining abalance with the overall profit level.

On page 13, here are the quarterly trends, showing sales and operating income for each of the three shortterm quarterly periods.
If you look from left to right from the fiscal year ended March 2021 to the fiscal year ended March 2022, you
can see that we have steadily increased sales, especially in the second half of the fiscal year ended March
2022, and operating income has clearly recovered from the major decline in the fiscal year ended March 2021,
when we were forced to severely restrict our activities around the world. As a result of the fact that the effects
of gradual deterioration of material costs and transportation costs are gradually becoming more serious, inthis graph, you can see the result that the increase in profits due to the increase in sales was not sufficient in
the short term for the third quarter and the short term for the fourth quarter of the fiscal year ended March2022.

Page 14 shows the stock prices from 2008. In April 2013, Mitsubishi Nichiyu Forklift was born. The chart thenshows the share price trends through the acquisition of UniCarriers’ shares, and the birth of Mitsubishi
Logisnext in October 2017, up to the present day.
That’s all for my explanation about the financial results.
Moderator: Thank you. We will now move on to our management policy for FY2022 and the progress of our
medium-term management plan. President Kubo, please begin.

Kubo: Thank you all for joining us today. I’m Kubo, President.
I will now explain our management policy for FY2022 and the progress of our medium-term management plan,but first I would like to say a few words.
We are now in the second year of our medium-term management plan, entering the growth and expansion
phase. As Mr. Uno just explained, in addition to the current important issues of rectifying the parts supply
network and recovering from production delays, the optimization of order backlogs and inventories is anurgent task for our group this fiscal year, and we are currently working as a unified group to quickly resolvethese issues while strengthening our financial base and promoting our growth strategy.
Furthermore, we will make a full-fledged effort to manage our company with a strong awareness ofsustainability, and strive to achieve sustainable growth of our company and increase our corporate value. As
a comprehensive manufacturer of logistics equipment that supports social infrastructure, the entire groupwill do its utmost to meet your expectations.
I will be stepping down as of next month, and today I would like to introduce my successor, Mr. Mano.
Mano: I’m Mano, and I will take over Kubo’s position as President. He would like to build a strong businessfoundation that will provide stable performance under the recent drastic changes in the business environment.
At the same time, we would like to actively work on our growth strategy, which is focused on future logistics
needs.

We will work together to achieve our mid-term management plan, Logisnext SolutionS 2023. At the sametime, we will strive to realize our corporate philosophy of contributing to the creation of the future bycontinuously providing solutions to our customers in every aspect of global logistics. We ask for yourcontinued support.

Kubo: I will now explain our management policy for FY2022 and the progress of our medium-term
management plan.
First, here are the results of global forklift shipments. Please be advised that from then on, the westerncalendar year will be read by the last two digits.
Please be aware that, while we have previously compiled the World Industrial Truck Statistics data by fiscal
year, due to a change in the statistical disclosure policy of this organization, we have now compiled the databy calendar year, from January to December.
The bar graph shows the number of shipments for the past five years for each region, and the pie graph in thecenter shows the number of shipments in FY2021 as a percentage of shipments by region.
In 2021, the forklift market showed a strong recovery, with shipments in all regions exceeding those of theprevious year, with global volume up 24.4% YoY to 1.969 million units.

This page shows the actual number of orders received in the forklift market, arranged by quarter.
Note that Class III self-propelled electric small lifts are excluded, and the number of orders received is also
calculated on a calendar year basis. The third quarter and the fourth quarter of 2021 saw a decrease comparedto the first quarter and the second quarter, and although the rebound in the COVID-19 disaster is subsiding,demand remains strong, growing by more than 10% YoY.

This page shows the number of orders received by each region over the past three years, with the FY2019
results set as one, and a bar graph showing the index.
The pie chart in the center shows the number of orders received in FY2021 as a percentage of total orders byregion.
As shown in the bar graph, strong orders continued to be received in the Americas, Europe, and Asia from
FY2019 to FY2021 due to the rebound increase from the COVID-19 crisis. The result was a 55% increase overthe same period last year.

On this page, I will explain our market outlook and sales strategies for each region for the current fiscal year.
In the Americas, Europe, and Asia, the market for the current fiscal year is expected to be lower than theprevious year as a reaction to the rapid increase in demand in the previous fiscal year. On the other hand,
Japan did not originally see a rebound increase from the COVID-19 crisis like other regions in the last fiscal
year, and the market is projected to be slightly higher than the last fiscal year. In addition, China’s prolonged
lockdown is expected to widen and the market is expected to decline slightly.
With regard to sales strategy, in all regions, we are working to normalize production by eliminating delays inthe supply of semiconductors and other components, and in the Americas, we are strengthening our sales
structure, direct sales rental business, and solutions business. In Europe, although there are concerns about
the prolonged problems in Russia and Ukraine, we will expand and strengthen our market share byintroducing new battery-powered vehicles and transferring production of small engine vehicles to Spain.

On this page, I will explain the production status and production forecast for the last fiscal year and the current
fiscal year.
The arrows indicate the increase or decrease in production volume in FY2021 compared to the original plan,and the increase or decrease in production volume in FY2022 compared to the plan in FY2021. Blue arrows
indicate an increase or flat growth, and red arrows indicate a decrease.
As indicated by the arrows, in the last fiscal year, production in the Americas and Europe fell short of the plandue to disruptions in supply networks and delays in the supply of parts, but we expect a significant increasein production this fiscal year as a result of improvement, rectification, and reduction of vehicles left over fromorders. In Japan, we expect to maintain production volume, while in China, as I mentioned earlier, production
volume is expected to decrease due to the transfer of production of small cars for Europe to our plant in Spain.

Next, I will explain our financial forecasts for the fiscal year ending March 2023.
As I mentioned at the beginning of this presentation, we are currently working on the most important tasks
for this fiscal year, which are to rectify the parts supply network and recover production and shipments, andto optimize the order backlog, which increased sharply last fiscal year, and to improve the long delivery time.
However, there are still concerns about production delays due to shortages in the supply of electronic
components used in semiconductors, soaring material and transportation costs, the emergence of geopoliticalrisks, and rising inflation in many countries. The uncertainty of the economic environment is expected toincrease further.
Under these circumstances, in Japan, the logistics equipment market such as forklift trucks is expected to be
steady at the same level as before the COVID-19 crisis, and the overseas market is expected to exceed thelevel before the COVID-19 crisis, and we expect this trend to continue in the current fiscal year.
In this business environment, we forecast consolidated net sales of JPY540 billion, operating income of JPY8
billion, ordinary income of JPY7 billion, and net income attributable to owners of the parent of JPY2.5 billion
for the fiscal year ending March 2023. Operating income before amortization of goodwill and other items will
be JPY17.5 billion, with a profit margin of 3.2%. Based on the consolidated earnings forecast, we plan to pay
a dividend of JPY9 per share.

This page shows a waterfall chart of the planned increase in operating income from the end of the last fiscal
year to the end of the current fiscal year, broken down by factor.
Once again, the chart shows our ability in the middle of the page based on the cost level at the end of the last
fiscal year. In response to this, we have summarized on the right-hand side the expected increases in material
and transportation costs for the current fiscal year and our measures to address these increases. Our planned
value is shown in the bar graph on the far right.
As I explained earlier, the longer lead times and delays in production and shipments due to delays in the supplyof various components, including semiconductors, will have an impact. Gross profit is expected to increase by
JPY10.4 billion due to the increase in sales in this period, and profit will increase by JPY1.1 billion due to cost
reduction of JPY1 billion and partial exemption of US tariffs in the previous term.
As for the increase in profit, although there is an increase in expenses of JPY8.1 billion, mainly due to personnel
costs in the Americas, we have added JPY2 billion due to yen depreciation, and our actual operating income
is estimated to be JPY20.67 billion, an increase of JPY7.6 billion YoY.
On the other hand, material and transportation costs, which once appeared to have peaked out, are expected
to deteriorate further, and the increased geopolitical risk in Ukraine and the lockdown in China are expected
to cause a significant downward swing, totaling minus JPY22 billion in the current fiscal year, following theprevious fiscal year.

We will make further efforts to reduce costs, raise prices, and strengthen our efforts in highly profitablebusiness negotiations to compensate for these factors, and as shown on the far right, we have set a final
operating income target of JPY17.5 billion, up 34.5% YoY.

I would like to continue by explaining the progress of our medium-term management plan, LS23.
In LS23, we have three basic strategies: strengthening corporate strength, promoting growth strategies, andimproving brand power. Last fiscal year was the first year of the mid-term management plan as the start-up
and foundation-building phase, in which we worked to reorganize our sales network, strengthened our sales
expansion system, and built our brand strategy in order to clarify the roadmap for implementing our basic
strategies.
In the second year of the medium-term management plan, we will position the current fiscal year as a phaseof growth and expansion, and will promptly resolve the problems of prolonged lead times due to soaring
material and transportation costs and delays in parts supply, as well as the optimization of order backlogs andinventories, strengthen our financial base, make appropriate investments including sales expansion systems,
and improve the recognition of the Logisnext brand. We will then aim to achieve the LS23 plan figures of
JPY500 billion in net sales and JPY30 billion in operating income before amortization of goodwill and otheritems.

The next slide will explain the status of specific initiatives for the three basic strategies.
First of all, this page shows the launch of a new product for the domestic market as one of the measures tostrengthen corporate resilience and existing businesses.
Following the battery-powered ALESIS forklift truck released in November 2019, we have launched the ERSIS,a new integrated model of small engine forklift trucks. The clean exhaust of the engine manufactured by thegroup company will provide excellent environmental friendliness, and the technology and track record
cultivated over many years will be used to achieve high workability and safety, leading to an increase indomestic sales volume.

On this page, I will explain the second part of strengthening existing businesses, new products developed
overseas.
The EDiA XL is a new type of battery-powered forklift truck for the European market, which was launched in
April last year. This is a new model in the mid-size class from 4 tons to 5.5 tons, designed to meet the demand
for a replacement for engine-powered vehicles, and equipped with an auto-boost function to increase driving
power as needed and a control to reduce vibration when lowering the mast. The new model is a highly
functional model with greatly improved environmental friendliness, workability, and operability compared tothe previous model.
With this, we aim to expand sales in the European market, where advanced carbon-neutral initiatives areunderway.

On this page, I will explain the third area of strengthening existing businesses, sales expansion in Asia andOceania.
To strengthen existing businesses, regarding the FB-80, the main compact battery-powered vehicle
manufactured at the Thailand plant, we added the three-ton class last year, bringing the total range of small
vehicles classes. Thanks to the high evaluation of the design, stability, and operability by many customers, we
contributed to achieving the highest annual production volume ever last year in FY2021, the 10th year since
the Thailand plant was established.
In the market, the trend toward battery-powered vehicles is expanding from the viewpoint of environmental
protection, and we will continue to develop and launch attractive products that are environmentally friendly
and easy to operate to meet the market needs.

I would like to continue by explaining the second of our basic strategies, the promotion of the solutions
business expansion as one of the growth strategies.
EQ Solutions was established as a solutions business unit of Equipment Depot, a direct sales company thathas been contributing to our business growth since its acquisition in 2019. EQ Solutions has expanded its
lineup of automated equipment, including material handling products such as racks and conveyors, unmanned
forklifts, and automated warehouses, centered on reach-type forklifts and rack forklifts for logistics
warehouses, and offers total solutions to customers in a wide range of industries, including manufacturing,
beverage, food, and wholesale. Sales are steadily increasing.

On this page, I would like to continue with the second part of the growth strategy promotion, the developmentof new technologies.
The demand for unmanned forklifts is increasing due to the global expansion of e-commerce and as a solution
to the labor shortage. However, many customers already have warehouse and storage facilities and operate
their warehouses with manned forklifts, making it difficult to add unmanned forklifts to existing environments.
To solve this problem, we are developing a mixed fleet solution at our European base, which is acomprehensive solution of middleware, software, and material handling equipment that enables manned andunmanned forklift trucks to coexist.
Today, we would like to show you a video of a case study of DHL, a major logistics company that has started
operation as a pilot customer. Now, please start the video.
[Video Begins]
Company Representative: DHL, the world’s largest logistics company, has introduced AGF, which wasdeveloped at our European site, to its warehouse in Belgium. It has installed several reach-type AGFs with amaximum lifting height of 8.5 meters, which operate 24 hours a day and automatically transport 1,000 pallets
per day.
DHL is actively promoting the digitalization of logistics, and we, as its partner, are working on the joint
development of logistics automation solutions.

[Video Ends]
Kubo: That is all for the video.

The third of our growth strategies, the use of unmanned transport technology, is a demonstration experiment
to automate the loading and unloading of trucks outdoors.
As announced in this news release in March of this year, the project has been launched jointly with KONOIKE
TRANSPORT CO., LTD. and MHI.
While indoor logistics in factories and warehouses are increasingly automated, truck loading and unloading
outdoors, such as under eaves, is mainly performed by manned forklift trucks. Currently, the challenges are
optimization of working hours and chronic labor shortages. By automating these operations, we aim to reduce
the workload of forklift operators and reduce truck dwell time, thereby contributing to manpower and laborsavings in the logistics field.

Regarding the third basic strategy, brand enhancement, I would like to explain our efforts to realize adecarbonized society as one of our ESG management practices.
We have received an order from Kamigumi Co., Ltd. for a carbon-neutral tire-type gantry crane, RTG, which
was jointly developed with MHI for the realization of carbon-neutral ports, which the Ministry of Land,
Infrastructure, Transport and Tourism is studying to form. Starting with two units during FY2022, a total of 18
units are scheduled to be installed by FY2027, contributing to the realization of carbon neutral ports.

As a second step to enhance our brand strength, we published the SDGs Report 2021 at the end of last year,
summarizing our SDGs initiatives.
We would like to introduce a few of our SDG initiatives that are included in this report. Recognizing thatclimate change is an important issue for society as a result of global warming, we clarified our policy on carbon
neutrality last December and set a goal to reduce our group-wide CO2 emissions by 40% by 2030 and toachieve Net Zero by 2040.
The entire group will take on the challenge of achieving this goal while making maximum use of thetechnologies and knowledge we have cultivated.
In order to make our efforts to address these important issues, including carbon neutrality, more effective,
we have reorganized our internal promotion system and integrated our environmental reports, which werepreviously published separately, into this SDGs report. This SDGs report is available on our website, and wehope you will take a look at it when you have time.

Finally, I would like to explain our response to the TSE market reform.
We have selected and applied for the Standard Market in the new market classification of the TSE. The
Company believes that it is optimal to maintain the current capital relationship with MHI and continue toutilize and strengthen cooperation with MHI’s comprehensive capabilities, as well as to manage the Company
independently as a publicly listed company.
As of June 30 of last year, the transition reference date, the tradable share ratio was 22.7%, which did notmeet the standard of 25% to maintain the listing on the Standard Market. However, we are pleased to report
here that we have achieved the 25% listing maintenance standard as of March 31 this year as a result of ourefforts to improve the tradable share ratio.
This concludes our presentation of the financial results for the fiscal year ended March 2022, as well as ourmanagement policy for the current fiscal year and the progress of our medium-term management plan.
Thank you for your attention.
Moderator: Thank you. This concludes the presentation.

Question & Answer

Moderator [M]: We will now move on to the question-and-answer session.
Please ask questions now.
This is a good opportunity for you to ask us any questions you may have.
〈Q1〉
Q1: I would like to ask just one question. I was wondering if you have any concrete plans for when the soaring
price of materials will peak out in the new fiscal year?
Uno: I’m Uno.
At the time of the initial planning process, I think the observed situation peaked around the end of the fiscal
year that ended in Europe and the United States. In addition, since the prices of materials in Japan lag behind
the rest of the world, we thought that the prices in Japan would peak around the end of the first quarter ofthis fiscal year, but at the end of the last fiscal year, Russia’s invasion of Ukraine caused a sharp rise in energy
prices, and there were signs in the US and Europe that material prices would start rising again. We expect topeak around the first half of the current fiscal year, or the end of the first quarter of the current fiscal year.
Q1: Thank you very much. I’m sorry, I have one more point to add, but can we assume that it is overseas
where price shifting is most likely to occur?
Uno: Yes, I think it is easy for customers in the US and Europe to understand the price increase based on lastyear’s one-year efforts and the feeling they have, and competitors are also taking the same measures to raise
prices. We feel that it is easy to raise prices under such circumstances.
Q1: Okay. Thank you very much. That is all from me.
〈Q2〉
Q2: First, I would like to ask Mr. Mano about two things. I am sure that you are thinking about various things
as you become the president. Looking at page 24, you are already planning to beat the JPY500 billion markfor the next fiscal year, and this year you are already planning to beat it.
In terms of profit level, you have been implementing aggressive strategies such as various restructuring,overseas impairment, and acquisitions over the past few years, but I was wondering if you could tell us what
you think is necessary in order to raise the profit level or profit margin level to another level in a sense as arecovery period.
Mano: I’m Mano. Thank you for your questions.
Certainly, as you point out, we have expanded our business over the past several years through acquisitions
and other means, and I think we have made some progress in this area, a kind of integration. I think that theresults have been achieved to a certain extent, but from my point of view, I feel that there are still areas wheremore can be done, such as eliminating waste. As you have pointed out, the current profit level is less than 3%,
but in order to raise it to the next level, I feel that we need to address the waste and duplication that still
exists in some areas around the world.

Q2: Is there a bias toward one area or another in the various stages of production, sales, and development?
Mano: I think the functions of development are being organized in a certain way. I feel that it is organized inJapan, Europe, and the US. We have a number of production sites and direct sales outlets, but the rate of
return varies considerably, so I feel that we need to look at this area in detail.
Q2: I see. Another thing is, this may sound a bit similar, but regarding the way you are involved with Mitsubishi
Heavy Industries, is a bit sensitive when it comes to capital, so it may be difficult to have a conversation, but
I would like to know something.
Is there anything that will change the distance in business in the future? For example, I was wondering if itwould be possible to lighten the burden, such as procurement difficulties, which you mentioned earlier, bycollaborating a little more with MHI.
On the other hand, I know that you have been talking about automatic loading and unloading of solutions forsome time, but I was wondering if you could tell us about the next step. Can you tell us how you are changing,or would like to change, the distance between you and MHI, not in terms of capital, but in terms of business?
Mano: I’m Mano. I think you have a point. For example, as I mentioned earlier about procurement, there havebeen various procurement challenges this time, and I think there are quite a few problems that have beensolved with MHI’s support, or rather, with the help of various networks. I would like to make use of thisexperience, and in the near future, rather than asking for help after a problem arises, I think I have theexperience to cooperate from the beginning, and I would like to cooperate proactively in the area of
procurement.
One more thing about solutions. We have issued press releases about cooperation with MHI in various areasof automation, but from my point of view, there are still some areas where our targets are not completelyaligned.
For example, I think that if we have more up-front discussions about whether we are targeting Japan or theworld, we will be able to eliminate wasteful investments and use the money very effectively.
We have already started discussions in this area, but for example, we may ask MHI to do more of theelemental engineering work, or we may work on the applications around the customer. I feel that we can doa lot of good things if we use our resources in a way that does not conflict with each other. In this sense, I
hope we can have open discussions and debates.
That’s all.
Q2: Let me confirm. Do you mean that MHI is not so enthusiastic? Or is it not like that?
Mano: No, it’s not like that. It’s difficult to say this in front of Chairman.
Mikogami: I am Mikogami. Since I am also the domain head, I would like to say a few words.
Regarding procurement, we received considerable cooperation from the procurement department of MHI
when there was a shortage of semiconductors. Even so, there were some things that did not go well, but I was
introduced to various people who helped us a lot, and depending on from which side we see the situation, it
is difficult to say whether we helped them or we were helped.
As Mr. Mano said, there are still many things we can do, and MHI has a lot of technology. There is quite a bitof technology that we don’t have and ML doesn’t have, and they are using it now to back it up.

However, it still takes time, and this is not something that can be done immediately to meet certain
requirements. I am sure you are aware of the various things we are doing with MHI, and as you know, wereleased products like ΣSynX, etc. This is quite conscious of us, and we are doing cooperation quite closely
Q2: I understand. Thank you.
Company Representative [M]: Thank you.
Moderator [M]: Thank you. Does anyone have any other questions?
The time is almost up, so if there are no other questions, we will conclude the Mitsubishi Logisnext Co., Ltd.’sfinancial results briefing.
Thank you very much for taking time out of your busy schedule to join us today.
Company Representative [M]: Thank you very much.