Mitsubishi Logisnext Co., Ltd.
Financial Results Briefing for the 2nd Quarter of FY2023
November 30, 2023

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 2nd Quarter of FY2023[Fiscal Period]

FY2023 Q2[Date]

November 30, 2023

[Time]

15:30 – 16:42(Total: 72 minutes, Presentation: 50 minutes, Q&A: 22 minutes)[Venue]Webcast[Number of Speakers]

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Takashi Mikogami
Yuichi Mano
Takatoshi Uno

Junichi Oi

Representative Director and Chairman
Representative Director and President
Director, Executive Officer, CFO, Division
Head, General Manager, Corporate Strategy
and Planning OfficeMember of the Executive Team, Head ofCorporate Finance and Accounting
Headquarters

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Presentation
Moderator: Thank you for your patience. It is now time to commence the quarterly financial results briefing
session for the second quarter of the fiscal year ending March 31, 2024 of Mitsubishi Logisnext Co., Ltd.
Thank you very much for taking time out of your busy schedules to attend our financial results briefing. Today,
I would like to present an overview of the financial results for the second quarter of the fiscal year ending
March 31, 2024 and the progress of the medium-term management plan.
I would now like to introduce today's attendees. Representative Director and Chairman, Takashi Mikogami.
Mikogami: I am Mikogami. Thank you for your cooperation.
Moderator: Yuichi Mano, Representative Director and President.
Mano: My name is Mano. Thank you.
Moderator: Takatoshi Uno, Director, Executive Officer, CFO, Division Head, General Manager, Corporate
Strategy and Planning Office.
Uno: My name is Uno. Thank you for your cooperation.
Moderator: Junichi Oi, Member of the Executive Team, Head of Corporate Finance and Accounting
Headquarters.
Oi: My name is Oi. Thank you.
Moderator: That is all. As for today's proceedings, Mr. Uno, Director, Executive Officer, CFO, Division Head,General Manager, Corporate Strategy and Planning Office will provide an overview of the financial results forthe second quarter of the fiscal year ending March 31, 2024, and Mr. Mano, Representative Director andPresident, will explain the progress of the medium-term management plan.
I will now move on to an overview of the financial results for the second quarter of the fiscal year ending
March 31, 2024. CFO Uno, please begin.

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Uno: Mitsubishi Logisnext, my name is Uno. Thank you for joining us today for our company's financial results
briefing for the second quarter of the fiscal year ending March 31, 2024. I would like to begin by providing an
overview of the financial results in H1 of today's presentation.
Please see page three of the document first. The market environment surrounding our company. The global
economy continues to experience slowing and decelerating growth due to monetary tightening in the US andEurope, and Russia's invasion of Ukraine. Although marine transportation costs subsided sharply in H1 of theperiod under review, we are aware of a broad range of inflationary conditions, including labor costs.
Under these circumstances, it can be said that the domestic market for material handling equipment has been
firm, but overseas demand is on a downward trend. Although the level has remained above the precoronavirus disaster level, it has been sluggish since Q2 of the previous fiscal year, and a recovery phase is not
yet in sight.
In Japan and the Americas, where we have a solid backlog of orders, we have worked to secure sales bypromoting shipments through production streamlining. As a result, we have also expanded the effects of priceoptimization in Japan and overseas.
This is a summary of our consolidated financial results under these circumstances. Net sales increased by apositive 23% YoY due to increased production and sales in Japan and the Americas, as well as the effect ofprice optimization and the impact of the yen's depreciation on foreign exchange rates. Operating income
before amortization of goodwill and other items increased 347.3% YoY, due to the contribution of increased
sales from the promotion of shipments, especially in the Americas, and the effect of price optimization.

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Please continue with the financial highlights on page four.
I would like to reiterate our key financial values. Net sales totaled JPY343.77 billion, operating income before
amortization of goodwill was JPY27.81 billion, operating income under the system accounting after
amortization of goodwill was JPY22.73 billion, ordinary income was JPY21.06 billion, and net income for thequarter was JPY16.56 billion. Net sales and all profit items were the highest ever for Q2. This is the result of
steady progress in production and shipments, the enjoyment of price optimization effects, the contributionof the yen's depreciation, and improved profitability.
The operating income margin before amortization of goodwill and other items was 8.1%, exceeding the 6%
operating income margin targeted in the current medium-term management plan, which concludes in thecurrent fiscal year. One of the reasons for the large increase in net income for the quarter was the reversal ofthe valuation allowance for deferred tax assets, i.e., a decrease in tax expenses, due to the resolution for
liquidation of the Chinese subsidiary, which was judiciously disclosed on July 20, 2023.
The table below shows the balance sheet, which will be explained later on page nine.

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In the documents that follow, I will explain in detail about sales and operating income. Pages five and six
explain the situation by segment and region. Please note that from this page onward, operating income before
amortization of goodwill, etc. will be referred to as operating income and explained as such.
Now, please see page five. Page five shows net sales and operating income by segment. As shown in the upper
chart, net sales increased by 23%. The domestic business, shown in blue, accounted for 15.6% of the increase,and the overseas business, shown in beige, accounted for 25.9% of the increase, both significant increases.
Both in Japan and overseas, the increase in revenue was particularly noticeable in the Americas, although it
was the result of efforts to rectify production. This is because the supply of engine control units for gasoline
engines was not smooth in H1 of the previous fiscal year due to a shortage of semiconductors, while thesupply of such units has been rapidly increasing since H2 of the previous fiscal year, resulting in a significant
increase in sales volume. The addition of the yen's depreciation to the above factors resulted in a 38.4%
increase in sales in the Americas compared to the same period last year. As a result, as the pie chart on theright shows, the share of the Americas in total sales rose to 52.7% from 46.8% in the same period last year.
Operating income in the lower line was up by a positive 347.3%, or JPY21.59 billion. Both domestic andoverseas businesses posted significant increases in profit, with domestic business increasing profit byapproximately JPY4.6 billion and overseas business increasing profit by approximately JPY17 billion,
respectively. The domestic business posted higher earnings, especially in the export sector from Japan, driven
by a weaker yen and subdued overseas transportation costs. In the overseas business, the Company achieved
significant sales growth in the Americas, and in addition, the penetration of sales price optimization in theAmericas, Europe, and other regions resulted in a large increase in profit.

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Page six. Page six shows YoY comparisons of sales by region and by quarter, with Q1 shown in blue and Q2
shown in beige.
In Japan, I explained earlier that the export business contributed to the increase in operating income, but withregard to sales, steady progress in shipments to the domestic market contributed to the increase in sales.
Unfortunately, however, Japan still lags behind the rest of the world in raising the prices of parts and materials.
Add to that the weak yen and inflation, and the contribution to profits from increased sales to the domestic
market was not sufficient.
Americas. The increase in sales in the Americas, as explained earlier on page five, was due to the steady
implementation of production and shipments against the backdrop of an abundant order backlog.
On the other hand, as you can see in the lower left-hand corner, sales in Europe increased by JPY2.25 billion
YoY, but as indicated in the callout, there was a JPY4.3 billion impact from foreign currency translation, so inreal terms, sales were down YoY. This is the result of the impact of Russia's invasion of Ukraine, the slightweakening of the German economy, and recessionary effects.
Sales in Asia and China also declined due to the economic slowdown in both regions, the impact of China's
economic bias, and the growing presence of Chinese forklift truck manufacturers' products.

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Please continue to page seven. Here, we show in a waterfall chart formula, after removing foreign exchange
effects, in which regions the increase in sales occurred. A brief explanation is provided at the top of the chart.
We believe that the situation in both domestic and overseas markets is as we have explained so far. Of the
23% increase in sales over the same period last year, the Americas contributed 15%, the combination
contributed 5%, and the domestic business contributed 4%.

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Page eight please. This section shows YoY changes in operating income by factor. The factors contributing to
the decrease in profit are shown from left to right, and how they were covered by the initiatives on the rightside to increase profit.
From left to right, the impact of inflation on material costs, labor costs, and other factors contributed to adecrease in profits of just under JPY8 billion. In the explanation given in Q2 of the previous fiscal year, we
indicated that the soaring transportation costs were a factor in the JPY23 billion decrease in profit. In
comparison, this shows that although inflationary conditions still persist, the easing has been significant.
From this, we can see that the contribution of price optimization, which is the biggest factor in the increasein profit in H1 of the year, amounted to JPY18.5 billion, following a favorable turnaround in transportation
costs, especially marine transportation costs, and an increase in gross profit due to higher sales. The additionof the impact of the yen's depreciation and other factors resulted in an increase in operating income of
JPY21.5 billion, from JPY6.2 billion to JPY27.8 billion.

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Page nine. The following is an explanation of the major changes in the balance sheet.
In FY2021 and FY2022, inventories increased significantly from supply chain disruptions, particularly atmanufacturing sites worldwide. In Q2 of the current fiscal year, inventories increased from the end of theprevious fiscal year, but not by a large amount, and the increase in inventories has shifted from an increasein production inventories at manufacturing sites to an increase in inventories at sales sites.
The increase in assets and liabilities on the balance sheet is not particularly noteworthy, except for theincrease in translation due to the weaker yen. As shown in the upper part of the document, retained earnings
increased by JPY15.6 billion in Q2. There was an increase of JPY11.7 billion in foreign currency translation
adjustments. As a result, net assets increased by JPY27.3 billion and the equity ratio improved to 19.8%.
As mentioned earlier, in the current medium-term management plan, which ends in the current fiscal year,
we have set a goal of achieving an equity ratio of more than 20% as one aspect of improving our financial
position. Although it depends on the exchange rate, we are just beginning to see the achievement of this goalby accumulating net income in H2 of the year as well.

9See page 10. Page 10 shows the status of cash flows.
Net cash provided by operating activities was JPY22.9 billion, an increase of JPY19.8 billion from the previous
year. Net cash used in investing activities increased by JPY13.1 billion from the same period last year to
JPY27.1 billion, due to an increase in investment in forklifts for rent and a change from a draw-down of shortterm loans receivable in the same period last year to a deposit, i.e., from an inflow to an outflow, in Q2 of thecurrent fiscal year.
As a result, free cash flow improved by JPY6.8 billion, from an outflow of JPY11 billion in the previous year toan outflow of JPY4.2 billion. Excluding the impact of short-term loan withdrawals and deposits, free cash flow
improved by more than JPY19 billion YoY, indicating that the increase in accounting profit was also captured
in cash flow.
See the pink arrows in the figure. This explains that investment expenditures for forklift trucks for rental,
which are included in capital investment expenditures, were financed by sales leaseback in the amount of
JPY13.1 billion. In the same way that sales and expenses in the rental business correspond over a period oftime, the Group aims to sustainably expand its rental business by using sales leasebacks to financiallycorrespond over a period of time between expenditures for the acquisition of rental assets and income
generated by the rental business.

10This is an explanation of the overview of the financial results for the second quarter of the fiscal year ending
March 31, 2024.
This section shows sales by category for each quarter from the previous year. Our sales consist of sales of newvehicles to customers, lease rentals to customers instead of sales, after-sales service income from providing
inspection services and repair parts replacement during the customer's period of use, and also income fromthe sale of used vehicles.
In the upper row, domestic sales increased 15.6% from H1 of the previous year to H1 of the current year, witha particularly large increase in sales of the products shown in blue, i.e., new car sales revenue. The same istrue for overseas sales in the lower part of the graph, showing that while after-sales service income is steadily
increasing both in Japan and overseas, the increase in sales for the period under review was driven by anincrease in new vehicle sales as a result of progress in rectifying production, with supply chain disruptions
being resolved around the world.
This concludes my presentation of the financial summary.

11Moderator: With that, we will move on to the explanation of the progress of the medium-term management
plan. Thank you. President Mano.
Mano: My name is Mano, the president. As Uno mentioned earlier, in H1 of FY2023, both sales and profits
were much higher than the previous year, reaching record highs.
While the global economy remains uncertain with continued inflation and the worsening situation in the
Middle East, the Company has been able to secure a sufficient backlog of orders and promote the rectificationof production and shipments as parts shortages have been resolved both in Japan and overseas. In line with
this, the effect of price optimization has been expanding.
This fiscal year is the final year of our medium-term management plan, which we call LS23, and we expect toachieve all of the LS23 targets. Today, I would like to explain the financial outlook for the current fiscal year,
which was revised upward in the recent earnings announcement, and the progress made in the final year of
LS23.

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First, please see page 16, forklift truck market shipment results.
Data from the World Industrial Truck Statistics (WITS) are available through Q1 of 2023, a calendar year inwhich shipments were delayed by six months due to a change in the statistical disclosure policy of the member
organizations.
The bar graph shows the number of units shipped in each region over the past five years, and the pie graphin the center shows the number of units shipped from January to March 2023 as a percentage of the total
number of units shipped in each region. For Japan and the Americas, since statistical data for each region aredisclosed, data for Japan and the Americas are shown as light-colored bar graphs for JIVA and ITA, respectively,
for January to September 2022 and 2023, respectively.
As the note at the lower left indicates, the JIVA and ITA are based on different standards than WITS, so thesefigures are for reference only. However, the market volume from January to September shows a slight
slowdown from the previous year in Japan, while shipments in the Americas are increasing at a faster pacethan in the previous year.

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On page 17, a bar chart shows quarterly trends in the actual number of orders received in the global forklift
market, excluding the small, self-propelled electric lifts, known as Class III. Also, as on the previous page, thenumber of orders received is also calculated on a calendar year basis.
Orders in Q2 of 2023 were down in all regions except China, where they were about 15% lower than in thesame period last year. Orders for forklift trucks were severely affected by deteriorating market conditions due
to monetary tightening in the United States and European countries, as well as growing concerns about aslowdown in the global economy amid the prolonged invasion of Ukraine by Russia, with no end in sight.
However, it still remains at a higher level than in 2019 before the coronavirus pandemic.

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Continuing, on page 18, the bar graph on page 18 shows our order volume for the five-year period including
the current period, with an index of 1 for January through September 2019. Please note that from this time
onward, the figures are based on a calendar year, in addition to the market figures shown on the previous
pages.
The pie chart in the center shows the number of orders received by the Company from January to September
2023 as a percentage of total orders by region. In Japan and the Americas, where the majority of our orders
are received, you can see that while orders in Japan have remained relatively firm, those in the Americas havedeclined significantly from the previous year, but are still above the levels seen before the coronavirus
pandemic.
With respect to Europe, the continuing geopolitical risks in Ukraine, the rapid deterioration of the real estatemarket with respect to China, and the ripple effects of the economic downturn in China in Asia, the numbers
have dropped significantly from the previous year and are now below the levels even prior to the coronavirus
pandemic. In Europe, China, and Asia, we do not foresee a bottoming out of the market, and we expect thedifficult situation to continue for the time being.

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On page 19, we will explain how our performance has changed since the acquisition of the former UniCarriers,and how our positioning in the industry has changed. The left side of the slide shows our performance since
FY2017, with a bar graph showing net sales and operating income, and a line graph showing operating margin.
The right-hand side shows the industry positioning of each competitor for FY2019 and FY2022, with thevertical axis representing operating margin, the horizontal axis representing net sales, and the size of the
bubble representing operating income amount.
Regarding our business performance, after the inauguration of Mitsubishi Logisnext in FY2017, we had beensteadily increasing our performance, but after a slowdown in 2019 due to the US-China trade friction, theglobal spread of the novel coronavirus infection from early 2020 caused a sharp decline in orders and a dropin our business performance.
Subsequently, orders improved with the resumption of economic activity, but the Company was hit by supply
chain disruptions, shortages of semiconductors and other components, and soaring material costs, which
prevented it from achieving a recovery in business performance. However, from the latter half of FY2022
onward, the Company's performance has improved dramatically due to progress in production rectificationand price optimization, and we expect record-high full-year results for the current fiscal year.
In terms of our position in the industry, although our sales are not as high as the top two companies, ouroperating profit margin has improved significantly over the past several years, and our presence in theindustry is steadily increasing.

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On page 20, we will discuss the progress of our medium-term management plan LS23.
Under LS23, the three basic strategies of enhancing corporate strength, promoting growth strategies, andenhancing brand power were set as follows: net sales of JPY500 billion, operating income before amortizationof goodwill of JPY30 billion, operating margin of 6%, and equity ratio of at least 20%.
As you know, we have already exceeded our sales target for FY2022, and our forecast for FY2023 is JPY690
billion, far exceeding our target. Operating income before amortization of goodwill and other items is
expected to be JPY50 billion, well above the LS23 target, due to the contribution of increased sales, priceoptimization, and foreign exchange effects, and the operating income margin is expected to be 7.2%. The
capital adequacy ratio is also expected to achieve the LS23 target of 20%.

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On page 21, we will explain our forecast for FY2023, which we announced on November 6, 2023. See the
FY2023 earnings revision column in the second row.
The sales volume remains unchanged from the initial forecast of 115,000 units. We have revised our net sales
forecast to JPY690 billion, up JPY60 billion from the initial forecast, operating income before amortization of
goodwill, etc., up by JPY15 billion to JPY50 billion, and net income up by JPY10 billion to JPY23 billion, all ofwhich are expected to be record highs, far exceeding the initial forecast.
Regarding dividends, since net assets at the end of FY2023 are expected to increase from the initial forecast,
we will increase the dividend by JPY3 to JPY19 per share, assuming a DOE or dividend on equity ratio of about2%.

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On page 22, a waterfall chart explains the factors behind the increase or decrease in operating income before
amortization of goodwill and other items versus the initial forecast in the revised forecast for FY2023, which
was presented earlier.
First, as a negative factor, we expect a rise in material costs in Japan due to the weak yen and other factors,
amounting to JPY3 billion. In addition, we have factored in a one-time cost of about JPY1 billion associatedwith the closure of the Swedish plant, which will be explained in more detail later.
On the other hand, positive factors include: sales are increasing due to production streamlining in theAmericas at a faster pace than planned, and the reaping of price optimization is accelerating; transportation
costs have peaked out and have subsided; and the yen has weakened more than the initial exchange rate
assumption.
The Company has factored in these factors. As a result, operating income before amortization of goodwill andother items for FY2023 is expected to be JPY50 billion, up JPY15 billion from the initial forecast.

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From page 23, we will introduce the details of the LS23's initiatives.
In fiscal 2023, we are in the completion and evolution phase of our business and are working to improve
profitability through all possible means, as well as providing safe and secure logistic solutions and promoting
initiatives to automate logistics.
For specific policies, please see the bottom half of the slide.
The first is about our efforts in the Americas and European operations to strengthen profitability andcorporate strength. The second is the establishment of a new organization to oversee the logistic solutions
business, the establishment of a new 50-50 joint venture with Jungheinrich in North America, andcollaboration with its parent company, Mitsubishi Heavy Industries, as part of the logistic solutions businessinitiatives. Third, as for brand strength enhancement, we will discuss brand awareness through new initiatives,
publication of the Integrated Report, and Long-Term Business Vision 2035.
From the next page, we will explain each of these three initiatives in turn.

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On page 24, we will explain the performance trends in the Americas, which is making a significant contribution
to strengthening profitability. The graph on the left shows the trend of orders in the forklift market in theAmericas, and the graph on the right shows the sales and operating income of MLA, which has a factory
function, and EQD, which provides sales services.
Regarding trends in orders, the current order situation is challenging, but orders are expected to remain at
the pre-coronavirus pandemic level, as demand, which expanded rapidly during the recovery phase from thecoronavirus disaster, has settled down, and market conditions have deteriorated due to monetary tightening
and other factors.
As for the performance of our subsidiaries in the Americas, MLA is making progress in rectifying production
at a pace that exceeds the plan at the beginning of the fiscal year, and we expect the company to continue toexpand its performance as in the previous fiscal year.
On the other hand, in EQD, although net sales will increase due to an increase in new vehicle sales, operating
income for the current fiscal year is expected to decrease slightly due to a slower utilization rate in the rental
business compared to the previous fiscal year.

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On page 25, we will explain the start of construction of a new battery-powered vehicle plant in the Americas.
Construction of a new battery car plant at MLA's Houston facility has begun to meet the growing demand for
decarbonized and battery-powered vehicles. The graph in the middle slide shows the projected production
volume and production capacity of battery-powered vehicles from FY2022 to FY2027.
The new plant is scheduled to start operation in 2024 and is expected to have sufficient production capacityfrom 2025. With the construction of the new plant, we will reorganize the plant layout to improve production
efficiency and expand sales of battery-powered vehicles in the US market.

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On page 26, we will discuss measures to enhance corporate strength. In Europe, as a measure to promotemanagement efficiency, we have decided to close the plant function of MLSE Sweden under MLE, our base,and transfer and consolidate production mainly at MLFI Finland.
The purpose of this production transfer is to reduce fixed costs by consolidating resources and improving
production efficiency, thereby strengthening the Company's ability to withstand changes in the businessenvironment.
MLFI is the largest plant in terms of production capacity among the three plants in Europe, and we decided tointegrate the two plants because they are located close to MLSE and produce similar products. The closure of
MLSE's plant functions and production consolidation is scheduled for December 2024, after which we intend
to further rationalize and improve the production efficiency of the entire MLFI plant.

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On page 27, we will explain how we are responding to the demand for battery conversion in Europe.
In Europe, the EDiA XL, a high-performance medium-sized battery-powered forklift truck, was launched in themarket in April 2021. Sales volume in FY2022 will increase significantly, approximately three times that of theprevious year, and sales in Europe are growing steadily.
The features of this product are that it can contribute to the realization of a decarbonized society through its
market launch, and that it is equipped with software that temporarily increases driving force during hill
climbing and acceleration, and an auto-boost function, making it suitable for use in environments where
power-hungry engine vehicles are used. The Company has also received the Red Dot Design Award, aninternational design award from Germany, and we believe that its design quality is highly regarded by themarket as one of its distinguishing features. EDiA XL is planned to be rolled out outside of Europe, and wehope to further expand sales in response to the accelerating demand for battery technology in the future.

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On page 28, we will explain the establishment of a new organization as part of our logistic solutions businessinitiatives.
The pie chart on the left illustrates the size of the automation equipment and logistic solutions market, whichis expected to expand at a CAGR of 12% from 2022 to 2026. While this is a tailwind for our logistic solutions
business, competition is expected to intensify and technological development to accelerate due to the entryof numerous venture companies in Japan and overseas.
In this business environment, we have established a preparatory office, which we call the LogSol Preparation
Office, as of October 1, 2023, to review our logistic solutions business structure and establish a neworganization to oversee it on a global basis.
The role of the new organization, as shown in the diagram at the bottom right, will be to oversee the currently
separate engineering, sales, and logistic solutions businesses at overseas bases from a horizontal perspective,
and to create a system to monitor earnings, allocate resources, and make strategic policy decisions from a
global perspective. We believe that this is our role. Through this, we intend to build a system to effectively
provide logistic solutions to meet the global demand for automation, thereby strengthening our business andexpanding our earnings.

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On page 29, we will discuss the establishment of a new company in North America as part of our logistic
solutions business initiatives.
The MLA Group established Rocrich AGV Solutions LCC, which we call Rocrich for short, as a 50-50 joint
venture with Jungheinrich, with whom we have a cooperative relationship in North America, and it started
operations in September 2023.
The left side of the slide shows a graph of the AGV market size in the Americas. The AGV market is expected
to expand rapidly, doubling in the next five years from USD600 million in 2022 to USD1.2 billion in 2027. Inview of the recent growth in demand for automation, the Rocla and Jungheinrich brands will becomprehensively handled by Rocla to offer a wide range of AGFs and AGVs, from standard to special
specifications, to meet customers' needs. We then intend to expand our business performance by providing
logistic solutions utilizing the technologies of both companies and our sales network.

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On page 30, we will introduce our collaboration with Mitsubishi Heavy Industries, Ltd. as part of our logistic
solutions business initiatives.
We exhibited our new unmanned forklift truck AGF-X equipped with ΣSynX [Sigma Synx] solution and DECCO
concept at the 3rd INNOVATION EXPO 2023, held from September 13 to 15, 2023, in collaboration with
Mitsubishi Heavy Industries. We demonstrated, for the first time, logistics operations using two types offorklifts, AGF-X and DECCO, equipped with Sigma SynX.
To give you a better idea of what we are aiming for, we would like to show you a video of an actual
demonstration of the AGF-X at the International Logistics Fair to deepen your understanding of our logistic
solutions business. Now play the video.
[Video Begins]
Narration: Mitsubishi Heavy Industries, Ltd. and Mitsubishi Logisnext are developing a next-generation
intelligent unmanned forklift truck, AGF-X, equipped with Sigma SynX, to be offered by Mitsubishi Logisnext.
AGF-X accurately detects the position and posture of objects and automatically avoids them, even if there are
obstacles on the travel route, achieving a maximum speed of 9 km/h. This is a speed comparable to that of askilled operator.
And turns are also made lightly, with little or no deceleration in this way. And everyone, please take a look.
AGF-X can thus also be used for nestainer rack. We developed the AGF-X to contribute to the future of logistics
with its flexibility to be applied to various logistics environments, ease of installation and operation, andworkability that is comparable to that of a skilled operator.

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[Video Ends]
Mano: How was it? MHI will contribute to the development of the logistics industry by proposing new logistic
solutions with high productivity and safety that can be flexibly harmonized with logistics sites, aiming for a
future of logistics in harmony with people and machines, as envisioned by the MHI Group.

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On page 31, we will discuss new initiatives to improve our brand strength. As a member of society, we areworking to improve employee engagement and awareness of our company through measures such as nextgeneration development in collaboration with multiple stakeholders, regional cooperation, and social
contributions.
For example, this fiscal year we sponsored the Kyoto Hannaryz and Shiga Lakes professional basketball teams,
and through activities in which employees participate, we have begun efforts to promote sports in local
communities, contribute to the development of the next generation, and increase employee engagement.
We are also working on a variety of other measures and continuously disseminating information about theresults of these measures, including through the use of social networking services, in order to improve ourbrand power.

29

Finally, on page 32, we present our current year's edition of the Integrated Report and our Group's long-termbusiness vision.
Since last year, the Company has been publishing an integrated report, revamping its previous SDG report.
The main topic of this year's edition incorporates the Long-Term Business Vision 2035, which clearly defines
the long-term business direction of the Group.
As a key point, the Company has identified two growth strategies that it should focus on in anticipation offurther changes in the logistics industry, which is currently facing many challenges, and has clarified that it
aims to achieve sales of JPY1 trillion by 2035 by developing its business in line with these strategies.
We have also newly defined the meaning of our existence in society, our purpose, and the values we support.
The integrated report is available on our website, so please take a look at it.
This concludes our briefing of the financial results for the second quarter of the fiscal year ending March 31,
2024, and the progress of the medium-term management plan. Thank you for your attention.
Moderator: Thank you very much. This concludes the explanation of the material.

30Question & Answer

Moderator: We will now move on to the question-and-answer session.
[Questioner1]
Q1: Two questions, please. One thing I would like to ask is to confirm the order backlog. On a securities reportbasis, as of the end of March 2023, I believe there was an order backlog of just over JPY340 billion. I
understand that during H1 of this fiscal year, while orders were falling, sales were up considerably as a resultof posting sales from the backlog of orders as of the end of September.
Also, you mentioned earlier that orders are slowing down a bit, so I would like to know how much of the orderbacklog will be booked as sales in H2 of the year and what level the order backlog will be at the end of March.
This is the first.
Uno: I would like to answer the first question. To answer your question in terms of the number of months ofbacklog, rather than the amount of money, we think it is ideal for any factory to have a backlog of 3.5 to 4
months in order to operate its business in stable production.
In the US, we received a large number of orders from customers in FY2021 and FY2022, but production was
sluggish, and at the end of FY2023, we still had an order backlog of about 1.5 years. We are now actively
promoting shipments and have been able to reduce the order backlog to about one year as of the end of thisSeptember.
Toward the end of the fiscal year, there is still some concern about the economy in the US, so we expect thatthe one-year balance of the order at the end of September will shrink to eight or seven months by the end of
the fiscal year.
As for other regions, demand in Japan has been fairly steady, and as of the end of September, the balance oforders in other regions, including Japan, was generally within three to four months' worth of order backlog.
I am not sure if this will be maintained toward the end of the fiscal year, but I am most concerned about theeconomic stagnation in Europe, which I think is more serious than in other regions. That is all.
Q1: Thank you very much. In the US, you still have a higher order backlog than usual at the end of the fiscal
year, so you do not know what will happen to orders in the future, but I think you can expect production to
be on track to a certain extent until H1 of the next fiscal year.
Uno: Yes. We hope you understand it that way.
Q1: Thank you very much. Second, I understand that the current mid-term plan has made considerable
progress in improving profitability, although I am talking about a slightly longer mid- and long-term. In thenext medium-term management plan, I would like to confirm whether the focus will shift more toward a
growth strategy.
What are your current plans for the next mid-term plan, in terms of whether you will aim for more top-line
growth by allocating more resources to areas such as solutions, as you mentioned earlier? This is the second
point.

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Mano: This is Mano. As you mentioned, we must, of course, maintain our current profitability in the next midterm plan, but we would like to focus on our growth strategy. One of the things I mentioned in mypresentation is that in the area of logistic solutions, I have the impression that customers are quite interested,
but there are some areas that have not yet led to actual orders, so we would like to double or even redouble
our global sales and set numerical targets for growth in the next mid-term business plan.
Also, in our existing business, we will continue to invest resources in product development in this area as wemove toward electrification for the future decarbonization of our industry.
Q1: Thank you very much. That is all.
[Questioner2]
Q2: Could you tell us some of the differences between the situation in the US and your company in terms ofthe market environment? Profit numbers are rising and looking at the rate of profit in the industry, it appears
that your company is moving up in the industry rankings as well. First of all, the fact that you have a large
backlog of orders is not surprising, since the data from the Fed and other sources in the US does not seem toshow any significant movement in backlogs. Is it possible that this is due to the fact that your company is able
to produce and respond to more and more customer orders in a short period of time?
For example, is it happening that prices are being reflected quickly, or that new products or new features arebeing added to meet customer needs? The first question is whether the volume of sales has increased, andprofits have improved, or whether there has been no significant change in the volume of sales.
Second, I would like to ask if there is any difference in the situation in the US by class, and if there is somekind of background that your company has been able to improve its profit margin to [inaudible] about thecurrent situation.
Thirdly, looking at the longer term, with the current rise in labor costs and labor shortages in the US, I believethat the need for automation will certainly increase in the medium to long term. On the other hand, in the
short term, the short-term trend appears to be decreasing because of Amazon's declining capital expenditures
and the actual decrease in new orders. Thinking in terms of the medium- to long-term trends and the level ofcurrent orders, is there a timing from here for another round of major growth in new orders, or are there any
signs of such a trend?
When that happens, do you envision a situation where forklift trucks will once again exceed the record
number of units with new orders? Or are you thinking of expanding into the solution business at once? Whatkind of growth do you see in the medium to long term, and when the US grows, in what way do you see this,forklift and solutions included? It has been a long question, but that is all. Thank you.
Mano: This is Mano. First of all, in terms of the situation in the US, the profit margin is up, and we don't really
see this as a sign that we are the only ones making progress in shipments. In that sense, we see that theindustry as a whole is still making progress with the shipments themselves.
However, what is characteristic is that, as we have heard from the local market, the profit margin is improving
because all the companies have accumulated a large amount of order backlogs, and we have heard that there
are quite a few cancellations in the industry due to the large amount of inventory accumulated at the dealers.
Looking at our statistics, we have the characteristic that the percentage of cancellations is very low, and if wemake sure that we have a backlog of orders, we can make sales accordingly. It was reported at a meeting of
an industry group that some companies have cancelled a large amount of order backlogs, and I think this is
one of the reasons why we are doing reasonably well in the US.

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Regarding the second point, the future of the US market, we have recently established a joint venture with
Jungheinrich, and we see the need for automation growing considerably. We have received a considerable
number of inquiries, and in this sense, there is no doubt that there will be a shift toward automation, but we
do not think that forklift trucks will suddenly disappear. We believe that the demand for forklift trucks willcontinue to be driven by a mix of automated and manned forklift trucks, and that the cooperation between
manned and unmanned forklift trucks will be the mainstream for some time to come. We will provide
solutions for that purpose.
However, manned forklift trucks will definitely shift to electric forklift trucks, so we are focusing our efforts
on electric vehicles in the US, especially in the area known as Class II warehouse equipment, and we are
currently investing resources in this area to increase our presence and market share in this area.
Q2: Thank you very much. Regarding the first point, what kind of strategy has your company been able tomanage this without having cancellations?
Mano: I am not sure if this is a strategy or not, but one of our greatest strengths in the US is that we have verystrong relationships with our dealers, and we have very strong independent dealers.
We have a very strong dealer network, and we have a long history of close communication with our dealers,
as well as a long-standing relationship of trust in this area. In that sense, I think our cancellations are lower
than those of other companies. This is just our view, but we believe that our dealer network and relationships
with our dealers are what differentiate us from our competitors.
Q2: So, you are saying that cancellations are occurring mainly in all classes, not that they are occurring largely
in Class III, for example, but that they are being talked about in all classes?
Mano: Yes. We have not been told which class this is specifically. The ITA in the US seems to have been paying
a lot of attention to cancellations recently, and they seem to be working on separate statistics and such, so
we will continue to monitor the situation closely, but we have not heard anything about Class III in particularbeing cancelled.
Q2: I understand. Thank you very much.
[Questioner3]
Q3: Thank you. I would also like to ask about the logistic solutions part. I found it quite interesting when I
looked at the Rocla brand's website, which is on page 29, where Jungheinrich and AGV have formed a joint
venture company.
When we talk about logistic solutions, we tend to focus on easy warehouse management solutions, where
there is a serious shortage of labor, but your company seems to understand that logistics, or thetransportation of goods, is also a serious issue in the manufacturing industry.
In particular, AGVs that operate on automobile production lines have been introduced, and I have a feelingthat you will probably take a different approach to logistic solutions in the future than other leading
companies. If you would like to talk about this in detail in the next mid-term business plan, could you tell us alittle about the direction in which you intend to differentiate yourself from other companies by making youredge more effective?
Mano: Thank you. This is Mano. As you pointed out, we believe that our strength lies more in the industrial
area than in the logistics side. We have established a joint venture between Jungheinrich and Rocla. They havedifferent segments of specialty, and Jungheinrich's strength is in the area you mentioned earlier, such as
automobile production lines. Rocla's strength is in round and rolled products, paper manufacturing, tires, and33

other unusual areas. We started this project with the idea that there would be no conflicts and that we would
be able to jointly use our resources.
Since we have only been in business for about two months, we are not sure what kind of customers we will
be able to develop in the future, but we would like to focus on industrial areas, and we would like to attack
heavy-duty areas.
Q3: Thank you. I had the impression that MHI would probably acquire Concentric, and that it would be
attacking energy-intensive or heavy-duty areas, but I also had the impression that it would be mostly forindustries that consume a lot of electricity. I was wondering if you could give us some additional informationon the direction of your business, or how it differs from a simple logistics warehouse.
Mano: In the heavy-duty area, Concentric is now starting to examine how this might also synergize with
automation in a slightly different way. As the forklift industry is also becoming increasingly electrified, wewould like to create synergies in this area, as there are areas where we can make use of this technology.
We are still waiting to see what kind of synergies will emerge, but I think there are various possibilities in theareas of electrification and automation, and we need to think carefully about how we can build on these
possibilities.
Q3: Thank you. We look forward to continuing to work with you as a truly one-of-a-kind forklift player. Thankyou very much.
Mano: Thank you.
Moderator: There being no further questions, this concludes the briefing on the financial results of Mitsubishi
Logisnext.
Thank you very much for taking time out of your busy schedules to join us today.
[END]

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