Machinery, Equipment &Infrastructure
Business Plan
Executive Vice President, President and CEO,Machinery, Equipment & Infrastructure
Kazuaki KIMURA
6.8.2015© 2015 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved.

Table of Contents

1. Business Overview
2. Review of 2012 Medium-TermBusiness Plan
3. 2015 Medium-Term Business Plan
4. Domain Policy
5. Business Strategies
6. Summary© 2015 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved.

11. Business Overview© 2015 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved.

22

1-1. Domain Launch and Restructuring of SBUs
Strategic restructuring of product mix
1. With domain’s launch in April 2014, 4 business headquarters were integrated
2. 26 SBUs were consolidated into15, generating synergies
Machinery & Steel Infrastructure Systems

General Machinery &Special Vehicles

Machine Tool

Air-Conditioning &Refrigeration Systems(4 SBUs)(2 SBUs)(4 SBUs)

Turbocharger
Material handlingequipment
EngineAgricultural
machinery

Machine toolPrecision cutting tooletc,

Air-conditioners
Packaged air-conditioners
for facilities
Refrigeration unit
for trucks and trailers
ＣＡＣ（16 SBUs)
Crane and Material handlingsystem

Metals machinery
Compressor

Rubber & tire machinery

Environmental equipment

Injection molding machine

Mechatronics system
machinery

Food machinery

Bridges

Newspaper
printing machinery

Parking system

Paper converting machinery

Other equipment
Deck machinery

26SBU

Advanced mechanicalsystems
Commercial
Printing machine

Machinery, Equipment & Infrastructure Domain（8 SBUs)(4 SBUs)(1 SBU)(2 SBUs)

Industry and Precision
Metals machinery
Instrument
Advanced mechanicalCompressor
systems
Environmental equipment Machinery･ Equipment
Mechatronics system
Hydraulics & Machinery
machinery

Turbocharger
Material handlingequipment
EngineMachine tool

Air-conditioning &refrigeration
ＣＡＣ

15SBU

Agricultural machinery© 2015 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved.

31-2. Organizational Chart

Business Strategy Division

Mitsubishi Heavy Industries
Machinery Technology Corporation

Mitsubishi Agricultural Machinery Co., Ltd.

Advanced Mechanical Systems

Machinery ・ Equipment

Mr. Kato

Air-Conditioning & Refrigeration Division

Machine Tool Division

Hydraulics & Machinery Division

Primetals Techonologies(Metals marhinery)

Mitsubishi Heavy Industries Compressor
Corporation (Compressors)

Mitsubishi Heavy Industries Environmental &Chemical Engineering Co., Ltd.
(Environmental Systems)

Mitsubishi Heavy Industries Mechatronics
Systems, Ltd. (Mechatronics System, Steel
Structure Equipment, Mechanical Parking
System)Mr. DoiMr.
Watanabe

Mitsubishi Nichiyu Forklift Co., Ltd. (Material
Handling Equipment)

Engine Division

Turbochargers

Mr.
Osaki

Mitsubishi Heavy Industries Automotive
Thermal Systems Co., Ltd. (CAC)Mr.
Yamazaki(Crane and Material handlling System, EC)(Paper Converting Machinery, Newspaper Rotary Press)(Food Packaging Machinery, Injection Molding Machine

Mr.
Okubo
Mr.
Tsuda

4
© 2015 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved.

Mr.
TottoriMr.
ShiraoHiroki
Kato
TakashiMikogami
KiyoshiOkazoeMamoruHasegawa

Procurement Department

Vice President, Machinery, Equipment & Infrastructure,
Senior General Manager

Quality Management Division

Production Management Division

Chief officer
Member of the Board,
Executive Vice President,
President and CEO
Machinery, Equipment &Infrastructure

Mr.
Hasegawa
Mr.
Kusumoto
Mr.
KajinoMr.
ShimmaMr.
TakedaMr.
Ninomiya

Automotive
Parts Division

Machinery, E quipment & Infr astructure
Kazuaki Kimura

1-2. Domain Conceptual Overview

Business strengthening through the initiatives bycross-divisional organization◇Seeking growth and strengthening ofoverall SBUs by building up businessfoundation with cross-divisional(4divisions) structure (shared functions)Ｓ Ｂ Ｕs

Cross-divisional sharing of production technologies;
Configuration of optimal production structure◇Expand scale and earnings growth of
the businesses applying optimal
management methods in line with each
SBU’s characteristic

Sharing of customer information (heat maps )Evaluation of Business strategies, potential alliances
Horizontal QMS deployment throughout domain

Cross-divisional organization (shared functions)
Business
Strategy
Division

Quality
Management
Division

Production
Management
Division

Procurement
Department© 2015 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved.

51-3. Major SBUs Domestic Production Bases◆ Business developments at domestic bases
Hiroshima
Machinery Works
・Metals Machinery・Compressors

Mitsubishi Agricultural
Machinery Co.,
Shimane Plant

・Agricultural Machinery

MiharaMachinery Works
・Packaging Machinery・Advanced Mechanical
SystemRitto Plant
・Machine Tool

Biwajima Plant

Shimonoseki
Shipyard &Machinery Works

・Air-Conditioning &Refrigeration
・CAC

・Hydraulics &Machinery
Mitsubishi Nichiyu
Forklift
Kyoto Plant
・Material Handling
Equipment

Iwatsuka Plant
・Injection Molding
Machine・Food Packaging
Machinery© 2015 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved.

Sagamihara
Machinery Works・Engine・Turbocharger

61-3. Major SBUs Overseas Production Bases◆ Global developments at 21 worldwide bases (Metals machinery excluded)

Rocla(Material Handling
Equipment）

MHAQ

MHICM
（Rubber tire Machine/
Machine Tool）（Air-Conditioning &Refrigeration）

Product

Number ofbases

Material Handling
Equipment

3

Turbocharger

4

Engine2

Netherland, Thailand,
China, USA
France, India

Compressor
Air-Conditioning &Refrigeration, CAC
Machine Tool

1

USA

8

Thailand, China, USA

3

India, China, USA

Countries
Finland, China, USA

FBH（Machine tool）

MTEE(Turbocharger）

MJA

MFD

（Air-Conditioning &Refrigeration）(Material Handling
Equipment）

MBRD（Air-Conditioning& Refrigeration）

MEA(Engine）

MCCA(CAC)
MENA(Turbocharger)
MCCC（CAC）

MCCC（CAC）

SMTC（Turbocharger）

MVDE(Engine）
MCO-I（Compressor）

MTA(Turbocharger）

MCCT（CAC)

MHI-IPT（Machine Tool)

MCFA(Material Handling
Equipment）

MACO（Air-Conditioning &Refrigeration）

THACOM(Air-Conditioning &Refrigeration）© 2015 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved.

71-4. Orders received / Net Sales by SBU
Forklift trucks, air-conditioning & refrigeration, and turbochargers
account for roughly half of domain’s business scale.

Orders received(FY2014)

Others

Net sales(FY2014)

Material
handling
equipment

OthersMaterial
handling
equipment

Machinetool

Machinetool

Airconditioning&
refrigeration

Environmental
systems

Airconditioning&
refrigeration

Environmental
systems

Compressor

Compressor

Metalsmachinery

Metals
Machinery

Turbocharger

EngineEngineMaterial handling equipment
Metals machinery

Turbocharger

Air-conditioning & refrigeration

Compressor

Turbocharger

環 Environmental systems© 2015 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved.

EngineMachine tool8

1-4. Orders received, net sales & operating income by domain
Ratio of orders received, net sales and operating income in FY2014◆ Domain account for about one-third of the MHI group in terms oforders received, net sales and operating income

Orders received
Machinery,
Equipment &Infrastructure
Domain28%

Net sales

Operating income

Machinery,
Equipment &Infrastructure
DomainMachinery,
Equipment &Infrastructure
Domain33%

28%© 2015 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved.

92. Review of2012 Medium-Term Business Plan

© 2015 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved.

10 10

2-1. 2012 Business Plan : Targets and Numerical Results◆In FY2014, the year the domain was launched, orders received, net sales
and operating income all grew significantly.
（in billion yen）

2012

2013

2014

TargetActualTargetActualTargetActualOrdersreceived

970.0

877.1

1,100.0

1,106.5

1,250.0

1,304.6

Net sales

1,000.0925.2

1,050.0

1,096.3

1,250.0

1,319.5

Operatingincome

40.0

36.5

50.0

51.6

78.0

84.1

Operatingincome ratio

4.0%

3.9%

4.8%

4.7%

6.2%

6.4%

※Areas shaded in yellow indicate results above target.
© 2015 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved.

112-2. 2012 Business Plan : Sales Trends of Major Business Areas◆In FY2014 orders received and net sales both increased 40% compared to FY2012,
largely owing to the business integration promoted in metals machinery and material
handling equipment businesses and to the overseas sales expansion ofturbochargers and air-conditioning & refrigeration equipment.

6.4%

Operating income ratio

3.9%
Ordersreceived Net sales

877.1 925.2

4.7%（in billion yen）

Othersその他

1,304.6 1,319.5

Machine tool
工作機械

Environmental

環境設備
systems

1,106.5 1,096.3

Compressor
コンプレッサ
Metals machinery
製鉄機械

Engineエンジン
Turbocharger
ﾀｰﾎﾞﾁｬｰｼﾞｬ
Air-conditioning &冷熱refrigerator

Material handling
物流機器
equipment

FY2012FY2013© 2015 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved.

FY201412

2-3. Review of 2012 Business Plan
Achievements of 2012 Business Plan
◆ Integrated 4 business headquarters and reduced numbers of SBUs as a result of the shift todomain system
・Optimal business operation attributable to synergies generated with individual strength of each
SBU.
◆ Acceleration of global developments
・Expanded overseas sales of turbochargers and air-conditioning & refrigeration equipment◆ Increased domain earnings through a variety of Cross-SBU initiatives in the following areas:
・Manufacturing: Encouraging of sharing production technologies, configuration of optimal
production structure (integration of die-casting factories, etc.)
・Sales:Developing of new business opportunities, sharing customer information
・Quality:
Carrying out of quality control thoroughly, deploying horizontal QMS
throughout the domain

FY2014 Business targets achieved
Operating income ratio in FY2013: 4.7% ⇒ Increased to 6.4% in FY2014© 2015 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved.

13

3. 2015 Medium-Term Business Plan

© 2015 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved.

14 14

3-1. 2015 Business Plan of MHI group
ＦＹ2014● Energy & Environment● Commercial Aviation & Transportation Systems● Integrated Defense & Space Systems● Machinery, Equipment & Infrastructure● Others

DomainOrdersreceived
4,699.1
billion yen

Net
sales
3,992.1
billion yen

Energy &Environment

Commercial
Aviation &Transportation
Systems

Integrated
Defense &Space
Systems

Operatingincome296.1
billion yen

Machinery,
Equipment &Infrastructure

ＦＹ2017Main measures andfluctuating factors

Orders/ Operating
Net sales income

・ Expanded synergies at MHPS◎◎・ Overall expansion of servicing
business○◎

・ Distributed power sources,
oil & gas, etc.

○-

・ Expansion of
Boeing-related business◎◎・ MRJ (contribution to net sales
starting FY2017)○△

・ Strengthening ofland transportation systems-○

・ Reform ofcommercial ship business-○・ Demand to hold steady throughFY2017; preparations for expansionof business in equipment, etc.

--

・ Synergies at Primetals(Metals machinery business)◎◎

・ Strengthening of compressors,
turbochargers, etc.

○○

・ Accelerated business restructuring(including M&A’s)○○© 2015 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved.

Ordersreceived
5,500.0
billion yen

Net
sales
5,000.0
billion yen

Operatingincome450.0billion yen
15

3-2. 2015 Business Plan of MHI Group : Growth Strategy
Business Domain

Strategies

Main Measures

Energy &Environment

・ Simultaneously pursue short-term
earnings and mid/long-term growth,with business expansion andprofitability at the core (swift
response to moves made by megacompetitors)
・ Promote long-term continuation
policy for nuclear power business・ Enter markets for high-performance models (large-scale GT);enhance lineups
・ Strengthen servicing business (employ ICT and big data; invest
human resources)
・ Expand networks of domestic and overseas manufacturing bases
・ Expand business in distributed power generation systems (joint
development with Machinery, Equipment & Infrastructure domain)・ Full-scale entry in oil & gas upstream business (keeping
collaborations and M&A’s in view)

Commercial
Aviation &Transportation
Systems・ Improve profitability of commercial
airplane products
・ Advance MRJ development andimprove airframe value
・ Undertake bold conversions incommercial and cruise shipbusinesses
・ Expand business in landtransportation systems

・ Promote increased production in businesses for Boeing anddevelop next-generation production processes
・ Steadily carry forward the MRJ’s development and develop a highvolume manufacturing base・ Develop a new infrastructure export model based on domainsynergies
・ Develop new business model for cruise ship business・ Strengthen ability to promote business in large-scale overseas
projects (Doha, etc.)

・ Undertake sustained strengtheningof existing businesses and prepare
for next expansion step (initiatives topromote overseas business andconversion to commercial market
needs)

・ Undertake concentrated strengthening of integrated defense
systems (land, sea, air)・ Newly launch a state-of-the-art technology business department
and promote the following:- Development of new overseas businesses through tieups withoverseas partners- Development consumer demand-based businesses applying
dual-use technologies

・ Along with the Energy &Environment domain, pursue
achievable and immediately effective
measures from the perspective of
supporting the MHI Group’s scaleand earnings

・ Promote and accelerate PMI in metals machinery and forklift
trucks・Expand compressor business in the field of oil & gas
・ Establish a global business structure for turbochargers
・ Further accelerate business restructuring (including M&A’s)

Integrated
Defense &Space
Systems

Machinery,
Equipment &Infrastructure© 2015 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved.

16

3-3. 2015 Business Plan of Domain : Numerical Target【Business expansion during the 2015 Business Plan】
・ Shifting to a highly profitable business of 1.8 trillion yen enhancing globalization &business restructuring by M&A/alliances

2012 Business Plan (FY2012～FY2014）
Orders受注
received

Net
売上

sales

2015 Business Plan (FY2015～FY2017）

Operating
営業利益（in billion yen）

income1,800.01,800.0
1,650.01,600.0
1,500.0
1,319.5
1,400.0（7.2%）
1,304.6
160.0
1,106.5 1,096.3
115.0（8.9%）（ ） Operating income ratio

877.1

925.2

（3.9%）（6.4%）（6.1%）

84.1

85.0（4.7%）

51.6
Excluding impact of
15-month fiscal year

36.5

FY2012FY2013

FY2014FY2015FY2016FY2017（Actual）（Actual）（Actual)（Target）（Target）（Target）© 2015 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved.

17

4. Domain Policy© 2015 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved.

18 18

4-1. Basic Policies of 2015 Business Plan

Create top businesses
in global niche markets
Ⅰ. Expand scale and earnings
in growing businesses

Ⅲ. Restructure and integrate
small/medium-scale businesses

・Turbochargers:
Establish 10-million-unit production system
・Compressors:
Capture North American oil and gas markets

Ⅱ. Accelerate PMI of the establishedjoint ventures
・Metals machinery:
Accelerate PMI through collaboration between
Primetals Technologies Ltd. and domain
・Material handling equipment
Harvest synergies from integration with Nichiyu

Cross-divisional sharing ofproduction technologies;
configuration of optimal
production structure

・For small/medium-scale businesses that facedifficulty achieving sustained growth independently,
promote business expansion/revitalization andstrengthening of earning capacity applying optimalmeans suited to each business’s traits

Sharing of customer
information

Horizontal QMS
deployment
throughout domain

Cross-divisional function sharing throughout domain© 2015 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved.

194-1. Basic Policies of 2015 Business Plan:
Strengthening of Earning Capacity

Improve earning capacity throughachievable, immediately effective measures.
FY2017
Operating income(in billion yen)

Restructure
and integrate
small/medium-scalebusinesses

FY2014
Operating income

84.1

Accelerate
PMI of theestablishedjoint
ventures160.0
Expand scaleand earnings of
growthbusinesses© 2015 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved.

20

4-1. Basic Policies of 2015 Business Plan:
Measures for Expanding Growth Businesses
Category

SBU

Details in following pages

Turbocharger

Global businessexpansionCompressor

Business expansion
through global M&A’s

Material
handling
equipment

Metalsmachinery

New domestic businessinitiatives and overseas
business expansion

Development of new
businesses and newmarkets through crossdomain sharing, etc.

Environmental
equipment

EngineAirconditioning&
refrigeration

Measures・Secure top global share in automotive market(establish 10-million-unit production structure).
・Expand sales in growing Chinese and North American
markets; achieve global sales/production network.
・Expand into truck market and develop electric products,
to achieve further business expansion.

【 Turbochargers:
U.S. plant opening ceremony】

・Capture the North American oil and gas markets.
・Secure top share in ethylene and fertilizer markets.
・Strengthen earning capacity through expansion ofservice business and incorporation of peripheral equipment.

・Harvest synergies from integration with
Nichiyu.
・Expand business scale and profits throughimplementation of growth strategies.

【Compressors:
Completion of U.S. plant】

・ Joint effort between Primetals and domain
to accelerate PMI (Achieve global M&A model).
・Further strengthen domestic business(solutions business, etc.).
・Expand new business areas(overseas PPP, wood biomass, etc.).

【Environmental equipment:
Singapore waste treatment plant】

・Expand business scale in distributed power systems
market.
・Expand existing engine business and OEM operations.
・Expand thermal solutions business.
・Participate in total energy solutions business.

© 2015 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved.

21

5. Business Strategies© 2015 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved.

22 22

5-1. Expand scale and earnings of growth businesses

Create top businesses
in global niche markets
Ⅰ. Expand scale and earningsof growth businesses
・Turbochargers:
Establish 10-million-unit production structure・Compressors:
Capture North American oil and gas markets

Ⅱ. Accelerate PMI of the establishedjoint ventures
・Metals machinery:
Accelerate PMI through collaboration between
Primetals Technologies Ltd. and domain
・Material handling System:
Harvest synergies from integration with Nichiyu

Cross-divisional sharing ofproduction technologies;
configuration of optimal
production systems

Ⅲ. Restructure and integrate
small/medium-scale businesses
・For small/medium-scale businesses that facedifficulty achieving sustained growth independently,
promote business expansion/revitalization andstrengthening of earning capacity applying optimalmeans suited to each business’s traits

Sharing of customer
information

Horizontal QMS
deployment
throughout domain

Cross-divisional function sharing throughout domain© 2015 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved.

23

5-1. Expand scale and earnings of growth businesses① Turbocharger
Business strategies

Business environment

・Whereas the traditional focus has been on turbochargers fordiesel-powered vehicles, going forward demand for use ingasoline-powered vehicles is expected to grow at annualized 10%.

O utput

・Sustained growth is expected in demand for turbochargers inpassenger cars.

【 Downsizing 】◆Expand sales for use in passenger carsand develop new products for entering
into the truck field.
・Develop variable-geometry
turbochargers for gasoline engines.
・Develop new systems.

・Chinese and North American markets for turbochargers forgasoline-powered vehicles are expected to grow significantly.

Turbocharger +Electric compressor

Supercharged engines
Secondstage
2 stages
Naturally
aspirated engines

2.0L

1.6L 1.2L

F uel ef f i ci ency

◆Enhance cost competitiveness and better quality

Basic management policies◆Establish 10-million-unit production structure by 2016.
(Secure top share in global market for passenger cars.)◆Achieve sales expansion in the growing Chinese andNorth American markets and a global production
structure with plants located near customers.
◆Accelerate development of new models, and pursue
differentiation through enhanced customer support.

・Develop and install the world’s most automated production lines.
・Expand global procurement.

◆Strategies for increasing orders (customer support)
・Strengthen European operation as ‘’The second development center’’.
・Meet customers’ demand for shorter engine development period.
5-axis machining center

Sample turbocharger workshop (Europe)

Orders received / Net sales
Orders received◆Establish global production system (10 million units by 2016)

Net sales

China
Japan

Netherlands

USA

Asia
FY2014FY2015FY2016FY2017© 2015 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved.

24

5-1. Expand scale and earnings of growth businesses② Compressor
Business environment

Business strategies

Market scale / trend
Impact to come from oil prices and other factors,
but expansion will continue over the long term<Market scale>
1412
10[Bil.$]

10.7

10.6

11.8

13.1

12.5

11.4

9.1

8.8

◆ Build up track record and expand market share in oil & gas
・Forge collaborative structures with major players liaising with
Oil & Gas Business Development Dept.
◆ Strengthen competitiveness and further increase market sharein chemical plant business・Maintain top market share in ethylene/fertilizer/methanol bystrengthening competitiveness through application of world’s
shortest delivery method (30% reduction in lead time)

8
6
4
2
0
[年度]

2008

2009

2010

2011

2012

2013

2014

2017

Basic management policies◆Secure significant business expansion and highprofits, to successfully compete in global market-Improve Japanese and U.S. production/service structures-Expand service business ratio◆ Strengthen sources of stable earnings through expansion ofservice business (net sales ratio: 40%)・Expand North American renovation and service business bylaunching U.S. production base.
【Operations at U.S. production base launched in April 2015】

Orders received / Net sales
Orders received

Net sales◆ Strengthen structures to achieve global growth

FY2014FY2015FY2016FY2017・Establish tri-polar (Japan/U.S./Europe) global business structure.
・Establish production bases in Brazil, Russia and Korea.
・Improve and enhance efficiency of business processes throughintroduction of global standards systems.

© 2015 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved.

25

5-2. Accelerate PMI of the established joint ventures

Create top businesses
in global niche markets
Ⅰ. Expand scale and earningsof growth businesses
・Turbochargers:
Achieve 10-million-unit production system
・Compressors:
Capture North American oil and gas markets

Ⅱ. Accelerate PMI ofthe established joint ventures
・Metals machinery:
Accelerate PMI through collaboration between
Primetals Technologies Ltd. and domain
・Material handling equipment:
Harvest synergies from integration with Nichiyu

Cross-divisional sharing ofproduction technologies;
configuration of optimal
production systems

Ⅲ. Restructure and integrate
small/medium-scale businesses
・For small/medium-scale businesses that facedifficulty achieving sustained growth independently,
promote business expansion/revitalization andstrengthening of earning capacity applying optimalmeans suited to each business’s traits

Sharing of customer
information

Horizontal QMS
deployment
throughout domain

Cross-divisional function sharing throughout domain© 2015 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved.

26

5-2. Accelerate PMI of the established joint ventures◆Promote PMI/harvest synergies in Metals machinery and Material handling equipment

Metalsmachinery・Development of worldwide business network throughintegration of respectively strong geographic regions
・Re-organization of domestic and overseas manufacturing bases
・Reduction and optimization of the costs ofprocurement and reserch & development
・Increase in EPC work
Prmetals Technologies, Limited opening ceremony

Material
handling
equipment

・Harvest synergies from business integration such as
sharing of components, operational efficiency enhancement, etc.
・Expansion of business scale and profits through implementation of“growth strategies” such as expansion of warehousing and service
businesses

New model of counterbalanced electric forklift trucks for Europe© 2015 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved.

27

5-2. Accelerate PMI of the established joint ventures
Metals machinery
Business environment

Business strategies

Market scale / trend
・Decline from approx. 3 trillion yen in FY2013
to approx. 2.4 trillion yen in FY2014
Market share, competitive status
・Estimated 10% market share in FY2013
Competitive superiority
・Response capability to market needs through formation of
full-lineup structure from upstream (blast furnace) todownstream (galvanizing equipment)・Market presence availing of global business bases(24 countries)

Basic management policies◆Meet the ever-increasing needs and challenges of thecustomers by providing world-class technologies,
lifecycle services, and equipment with superior-quality
workmanship◆Accelerate integration synergies and secure position of
the world leader in metallurgical plant solutions

FY2014

Net sales

FY2015

Start up 6 task forces charged with the following tasks
１．Review and boost efficiency of sales and marketing structures
２．Optimize total company organization (flat, swift decision-making)
３．Reap synergy effects (optimization of supply chain and R&D scope)
４．Eliminate redundant products and technologies
５．Create plans for achieving optimal operation of production bases
６．Undertake cost structure analysis and strengthen competitiveness◆Secure orders availing of comprehensive capabilities
・For each project, conduct an analysis of other companies (technology/
competitiveness) to make the proposal strategy
・Enhance maintenance and service business(expand orders for small/medium-scale renovation work and spare parts)
・Introduce and expand sales of former Siemens’s upstream/non flat products
into the Japanese market◆Promote development of new technologies(including environmental) matching customer needs◆Secure profitability through sound implementation of ordered
projects

Orders received / Net sales
Orders received◆Strengthen corporate structure throughpromotion of PMI activities

・Strengthen project management (enhance the entry management andthe coordination among the local entities)
・Prevent reoccurrences of malfunction/complaints.

FY2016FY2017

Electric furnace© 2015 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved.

Hot rolling mill28

5-3. Restructure and integrate small/medium-scale businesses

Create top businesses
in global niche markets
Ⅰ. Expand scale and earningsof growth businesses
・Turbochargers:
Achieve 10-million-unit production system
・Compressors:
Capture North American oil and gas markets

Ⅱ. Accelerate PMI ofexisting integrated companies
・Metals machinery:
Accelerate PMI through collaboration between
Primetals Technologies Ltd. and domain
・Material handling equipment:
Harvest synergies from integration with Nichiyu

Cross-divisional sharing ofproduction technologies;
configuration of optimal
production systems

Ⅲ. Restructure and integrate
small/medium-scale businesses
・For small/medium-scale businesses that facedifficulty achieving sustained growth independently,
promote business expansion/revitalization andstrengthening of earning capacity applying optimalmeans suited to each business’s traits

Sharing of customer
information

Horizontal QMS
deployment
throughout domain

Cross-divisional function sharing throughout domain© 2015 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved.

29

5-3. Restructure and integrate small/medium-scale businesses
Business expansion/revitalization and strengthening of
earning capacity of small/medium-scale businesses
having difficulty achieving sustained growth independently

Measures
For profitable, non growth businesses
1. Expand through M&As/alliances so as to be mutually complementary andreinforce each business
2. Strengthen business structures and resources through business consolidation and/or creating
business entities

For lower profitable businesses

3. Revitalize through M&A/alliances
In case of difficulty of above measure, reallocate resources to growth businesses throughwithdrawals from the businesses, etc

To make all SBUs profitable and expand the profit margin
within the 2015 Medium Term Business Plan
© 2015 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved.

30

5-3. Restructure and integrate small/medium-scale businesses
Near-term business restructuring plans
1. Expand through M&As/alliances so as to be mutually complementary and reinforce each other’s businessBusinesses

Plans for implementation

TimingElectrostatic
precipitators

Integration with Hitachi Plant Construction, Ltd.
and conversion to group company of MHPS(Mitsubishi Hitachi Power Systems)

10.01 2015

Tunnelexcavation
machineryIntegration with Japan Tunnel Systems Corporation

01.01 2016

2. Strengthen business structures and resources through business consolidation and creating business entities
Hydraulicmachinery,accelerators,
ITS

Restructuring/integration of small/medium-scale businesses and consolidation into
MHI-MS ( Mitsubishi Heavy Industries Mechatronics Systems, Ltd)

10.01 2015

Machine tool

Creation of new business entity with sales company

10.01 2015

3. Revitalize business through M&A/alliances
Bridges
Transfer of stocks to Miyaji Engineering Group, Inc.
construction
Material
Crane
and Material
handling
Handling
Systems Integration with Sumitomo Heavy Industries Material Handling Systems Co., Ltd.
systems
Agricultural
by
Capital participation by Mahindra& Mahindra Ltd. of India
machinery© 2015 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved.

04.01 2015
10.01 2015
10.01 201531

5-3. Restructure and integrate small/medium-scale businesses
1. Expand through promoting M&As/alliances with other companies in the same business categories
so as to be mutually complementary and reinforce each other
Electrostatic precipitators（EP）
Integration with Hitachi Plant Construction, Ltd.

Tunnel excavation machinery
Integration with Japan Tunnel Systems corporation

Aims

Aims
◆Attract domestic demand and accelerate overseas expansion◆Strengthen business by achieving full AQCS
(air quality control system)
・Achieve full lineup by adding electrostatic precipitators
to MHPS group’s deNOx / deSOx equipment, gas-gas
heaters, heat recovery systems
・Accelerate overseas expansion of electrostatic precipitators
applying MHPS’s overseas response capability,and boost competitiveness through consolidation in areas
besides electric power

・Domestic market demand will shrink after the Tokyo Olympics,
whereas overseas demand is expanding.
・In view of market trends, integration of MHI’s shield tunnelingmachine business, which has outstanding technological capability
and a track record on global scale, with JTSC, which has the top
domestic market share, will be taken under consideration.
・Aim is to become a global leader in shield tunneling machines bycombining areas of strength and mutually complementary technologies*.

Ownership ratios

AQCS equipment configuration

・JTSC
・MHI

Denitrificationequipment

GGH

EPDesulfurizationequipment

GGH

60%
40%

Shield machine（Tunnel excavation machinery）

（※）
・JTSC
Lineup from small/medium to large
diameter machines
・MHI
Large-diameter machines,
stone-cutting machines, bedrock
excavators, technology enabling
response to special usage conditions© 2015 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved.

32

5-3. Restructure and integrate small/medium-scale businesses
2. Strengthen business structures and resources through promoting business consolidationand creating business operating entities
Machine tool,
Creating business entity with sales company

Hydraulic machinery, Accelerators , ITS *,consolidation into MHI-MS *

Aims

Aims
◆Synergy from combining products/technologies;
flexible allocation of resources through achievement of
numerous areas of business strength◆Strengthen business structure to compete against
specialized manufacturers

・Expand applications of hydraulic technology to testing/inspection
equipment, culture/sports facilities, etc.
・Accelerate integration of mechatronics technologies and provide
system products applying accelerators
・Enhance efficiency through integration of domestic ITS* installationand maintenance work
・Expand applications of ITS and ICT** to other products
Hydraulic motor

Testing equipment(vibration-induced destruction testing system)

・As market demand structure undergoes vast changes, specialized
manufacturers are increasing their competitiveness through swift
decision-making.
・To compete: Strengthen market response capability throughconversion to a business entity
Enhance organizational flexibility by unifying production andmarketing.
Achieve swift decision-making and clarify business responsibilities
Ritto Plant(Headquarters of
New business entity)

Gear grinding machine（*） ITS: intelligent transportation systems(highway toll collection systems, traffic control systems, etc.)
ICT: information and communications technology
MHI-MS: steel structures, mechanical parking systems, testing equipment,
culture/sports facilities, etc.

© 2015 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved.

33

5-3. Restructure and integrate small/medium-scale businesses
3. Revitalize business through M&A/alliances
Bridges Construction:
Transfer of stocks to Miyaji Engineering Group, Inc.
◆Strengthen market response capability through integration ofstrong fields and synergies in sales and technology
・The market for bridges construction is expected to enter a recovery phase going forward.
・By transferring stocks to Miyaji Engineering Group, having a good sales record in steel bridges,
earning capability will be strengthened through the accumulation and improvement of technologicalcapabilities and management streamlining.

Crane and Material handling systems : Integration with SHI-MHS*◆Strengthen domestic market response capability throughexpanded product lineup and synergies
・Long-term market trend looks for maturation along with contraction of domestic industries.
・Improvement of product models and service lineups, integration of technological capabilities
and knowhow, and optimal allocation of management resources
・In the future, growth capital will be invested overseas and into new products and businesses.
* Sumitomo Heavy Industries Material Handling Systems Co., Ltd.

Agricultural Machinery: Capital participation by Mahindra & Mahindra Ltd. of India◆Expand OEM supplies and expand business in global markets
through procurement and technological synergies

Press conference announcing alliance・Strengthen response capability to domestic and overseas markets through building of
efficient supply chain and achievement of low costs
・Improve Mahindra & Mahindra’s lineup, expand Asian business through wider adoptionof Japanese type farm equipment, and expand OEM supplies to global markets© 2015 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved.

34

6. Summary© 2015 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved.

35 35

6. Summary

Business Initiatives of
Machinery, Equipment & Infrastructure Domain
・Expand scale and earnings of growth businesses
・Accelerate promotion of PMI at the established joint ventures
・Restructure and integrate small/medium-scale businesses

Implementing effective and achievable measures to support
the foundation of MHI group’s growth in scale and earnings© 2015 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved.

36

Forecasts regarding future performance in these materials are based on judgment made in accordance withinformation available at the time this presentation was prepared. As such, those projections involve risks andinsecurity. For this reason, investors are recommended not to depend solely on these projections for making
investment decision. It is possible that actual results may change significantly from these projections for a numberof factors. Such factors include, but are not limited to, economic trends affecting the Company’s operating
environment, currency movement of the yen value to the U.S. dollar and other foreign currencies, and trends ofstock markets in Japan. Also, the results projected here should not be construed in any way as being guaranteedby the company.

© 2015 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved.

37