Management Overview of Fiscal Year 2023
(ended March 31,2024)
May 8, 2024

Hiroshi Ide
Representative Director, President, and Chief Executive Officer
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Contents

1. Progress with Group Management Policies 2023
2. Medium- and Long-Term Business Portfolio Stance
3. Growth Businesses (Civil Aero-Engines, Defense, and Space)
4. Development-Focus Businesses (Fuel Ammonia Value Chain)
5. Looking beyond “Group Management Policies 2023”

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2

Progress with Group Management Policies 2023

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3Progress with Group Management Policies 2023
Advanced in each business category towardmedium-and long-term growth objectives
Development-focusbusinesses• Steadily developed fuel ammonia value chain business, notably byconducting the world's first fuel 20% ammonia substitution
demonstration test at JERA's Hekinan Thermal Power Station• Fully accounted for costs of additional inspection program for
PW1100G-JM engines in fiscal 2023

Growthbusinesses• No change in expected number of aircraft on ground or relatedcompensation and additional maintenance costs under programexcluding forex impact• Civil aero-engine business entered growth phase, while defense,space, and civil aviation maintenance, repair, and overhaul work
expanded steadilyCorebusinesses• Lifted lifecycle business revenues and orders by 50% from fiscal
2019 level, and seek further profitability gains• Accelerated transformation of low-profit businesses into leanentities through structural reforms, business portfolio reviews, andother initiatives

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Progress with Group Management Policies 2023
Thorough companywide initiatives to bolster operating cash flow
Investments to foster medium- and long-term growth
while maintaining financial discipline
Safety, Compliance,and Quality

Strengthen operating cash flows
Key initiatives• Expand civil aero-engine and defense
businesses• Expand profitability through lifecycle
businesses• Reduce working capital

Development-focus
business investmentsCore business
investments

Investment
budgetFY2023~2025¥ 450Billion

Overhaul business portfolio
Divest assets

Growth business
investments

Shareholder returns
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Progress with Group Management Policies 2023
Strengthening the Balance Sheet by Profit Growth,Streamlining the Business Portfolio and Asset Sales(Billions of yen)

Total assets (left axis)

Debt-to-equity ratio(right axis)
2.50

2,000

2.00
1,500

1.50

1.00
1,000
0.50

500

FY2019FY2020

FY2021

FY2022

FY20230.00

Note: FY2023 represents the year ended March 31,2024
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Medium- and Long-TermBusiness Portfolio Stance

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Medium- and Long-Term Business Portfolio Stance
Development-focus and growth businesses to underpin
medium- and long-term expansion
After overhaulNowDevelopment-focus
businesses

Development-focus
businesses

Fuel ammonia value chain businesses

Growth businesses
Civil aero-engines, defense,and space

Fuel ammonia value chain businesses

Reallocate cash andhuman resources
Growth businesses
Civil aero-engines, defense,and spaceCore businesses
Prioritize deepening
and evolving lifecycle
businesses

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Core Businesses

8Medium- and Long-Term Business Portfolio StancePursue sustainable growth by overhauling businesses
Envisaged corporate
value creation
Developmentfocus businesses

Near term

Fuel ammonia
value chainbusinesses

IHI Group

Medium term
（2030）Long term（2040）

Civil AeroEngines

Growthbusinesses

DefenseSpaceGrowthcandidatesCore businesses

Stable revenuebase
Restructuredbusinesses

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9

Growth Businesses(Civil Aero-Engines, Defense, and Space)

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10Growth Businesses

Overview for Civil Aero-Engines, Defense, and Space
Supply core propulsion technologies from space to the oceans
Source: *5©Airbus

Hydrogen fuel cell electric Hybrid electric
propulsion aircraft
propulsion aircraft

Source: *4

Civil aircraftRevolutionaryaircraft
Source: *6

Guided missiles
Source: *3Fighter jets

Defense engines

Courtesy of GE Aerospace

Civil aero-engines

Space rockets

Source: *8

Source: *2

Helicopter engines

Helicopters

Electrification
technologies©JAXA

Source: *7

Gas turbines formarine vessels
Source: *1

Ships of the Japan
UnmannedMaritime Self-Defense underwaterForcevehiclesSolid-fuel rockets
Hydrogen propulsion
technology

Lightweighttechnologies

Propulsion

Turbopumps
Material
technologies©JAXA

Satellitethrusters

Satellites and probes

Note: See Appendix 2 on slide 28 for sources
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11Growth Businesses

Overview for Civil Aero-Engines, Defense, and Space

60020%

50010%

4000%

300-10%200-20%100-30%0

FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 FY2025
See note 1)

See note 2)

Civil Aero-Engines

Operating profit

Sales (billion yen)

Sales and operating profits have grown significantly,exceeding pre-pandemic levels

DefenseFY2023 sales¥426.3 billion(See note 2)

Space-40%

See note 3)

Note 1: FY2019 figures is based on IFRSNote 2: Excluding impact of PW1100G-JM powder metallurgy issue in FY2023
Note 3: FY2025 forecasts disclosed in Group Management Policies 2023 subject torevisions based on future exchange rate fluctuations
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12

Growth Businesses

Growth Prospects for Civil-Aero Engines, Defense and SpacePursue sustainable growth in civil aero-engine, defense and space segments• Generate steady growth in civil aero-engine business to meet rising air travel demand

10,000• Expand defense business in response to Japan’s Basic Defense Policy , “Fundamental
reinforcement of Japan’s defense capabilities”• Cultivate space business as long-term growth driver
Cultivate as longterm growth driverSpaceBillion yen

500
5,000

Defense

Civil Aero-Engines02023

2025

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Keep expanding ascore business

Grow further by
expanding defense
business

Expand business throughthe transfer of defense
equipment overseas

Electrification andHydrogen propulsion
technology development toattain carbon neutrality

2030

Note: Excluding impact of PW1100G-JM powder metallurgy issue in FY2023

2035

13

Growth Businesses

Future-Oriented Initiatives
Expand and create new businesses by synergizing technologies andexpertise in civil and defense business
Cultivate businessthrough dual use indefense and civilsectors

Engine parts exports(Transfer of defense equipmentoverseas)

Materials production

Parts machining

F135 engine maintenanceR&D andengineering
Lifecycle businesses

Apply solid-fuel rocket technology in:• Satellite launch business• Defense rocket motors

Vertically integrated
supply chain

Apply satellite data in:• Forest management• Multi-domain surveillance systems
combined with unmanned vehicles

Manufacturing

Courtesy of GE Aerospace

Spare parts,maintenance& repairSource: *1Source: *1

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Operate globally bysharing civil aeroengine throughdefense expertise

Business structure(create added value)

Operationalsupport
Source: *2

Next-generation fighter aircraft(Global Combat Air Programme)

Source: *4
Source: *3

Note: See Appendix 2 on slide 28 for sources 14

Growth Businesses

Civil Aero-Engines
Expand sales and improve profitability by linking development and mass
production to aftermarket business• Spare parts sales rebounding, particularly for small and medium-sized models, on air travel growth• Seeking to enhance sales and profitability by leveraging virtuous circle in aftermarket business forengine development and mass production programs in which IHI has participated

7,000

7,000

6,000

6,000

(Billion yen)

億円

500
5,000

5,000

400
4,000

4,000

300
3,000

3,000

200
2,000

2,000

100
1,000

1,000

02023
FY2023EnginesEngine

AfterMarket他etc.
Aftermarkets,

FY2023 sales
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0Develop and massproduce best-sellingengines

2025
FY2025

Expand aftermarket
business after
developing and massproducing engines

FY20302030
EnginesEngine

FY20402040Aftermarkets,
After Market他etc.

Expand sales
Note: Excluding impact of PW1100G-JM powder metallurgy issue in FY2023

15

Growth Businesses

DefenseLeverage technological prowess to contribute to“Fundamental reinforcement of Japan’s defense capabilities”• Japanese government aims to increase defense budget to 2% of GDP by FY2027
Defense buildup program budgets

Seven priority programs to Fundamental
reinforcement of Japan’s defense capabilities(Trillion yen)
50

43.5

45
40
3530
25
20

¥0.2→5 trillion

Integrated Air andMissile DefenseCapabilities¥1→3 trillion

Unmanned DefenseCapabilities¥0.1→1 trillion

Cross-Domain
Operation Capabilities

17.2

Mobile Deployment
Capabilities/CivilProtection

15

Command-andControl andIntelligence-related
Functions1050

Stand-Off Defense
Capabilities

Medium-Term Defense
Program
FY22(FY2019~FY2023)

Defense Buildup Program
FY27(FY2023～2027)

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Source:*1

Sustainability andResiliency

Large budget allocations,especially in areas within
IHI core competencies

Source: *2

Defense rocket motors

Unmanned underwater vehicles

Aero-engines

Source:*3Space Domain
Awareness satellites

Transport aircraftengines

Source: *4Satellite
constellation

Maritime
DomainAwareness
Aero-engine maintenance,repairs, and operations, andauxiliary capabilities

Nuclear, biological, andchemical warning systems
and decontamination sets

Note: See Appendix 2 on slide 28 for sources

16

Growth Businesses

Defense Business Growth Outlook
Expanding sales and securing appropriate earnings in light of defense
budget growth and institutional reforms
Enhancing profit margins as partof defense industry policy

IHI’s defense business sales
Targeting 2.5-fold sales growth and 10%
profit margin compared with FY2022 levels3,000

Around ¥250 billion
250
2,500

Cost fluctuations
adjustment rate
1.0～5.0%

Set
according tocontract
period

200
2,000

150
1,500

Around ¥100 billion

Standardprofit rate

Profit rate
5.0～10.0%

Set
according toQCD
assessments

100
1,000

Traditional margin

Gas turbines for
JMSDF* anddefense
equipment

505000

FY2023 contracts
onwardDefense rocketmotors

Aircraft engines
for Ministry ofDefense

FY2022FY22FY2030
FY30* Japan Maritime Self-Defense force• Corporate efforts reflected in profit margins through Ministry of Defense evaluations of quality, cost, and delivery management• Deploying a cost fluctuation adjustment rate absorbs the risk of cost increases from higher prices and other uncontrollable factors
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Growth Businesses

Global Combat Air Programme (GCAP) Engagement
Enhance collaboration with government andBritish and Italian companies to advance program• IHI has participated as engine provider since 2020 in Ministry of Defense's next-generation
fighter aircraft development project• Under GCAP, will play a vital role by stepping up collaboration with the public and privatesectors• Exercise our engineering capability to ensure GCAP’s success and contribute to Japan’s
security and industrial advances

Computer-generated image sourced from *1 in Appendix 2
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18

Development-Focus Businesses(Fuel Ammonia Value Chain)

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Development-Focus Businesses

Long-Term Expansion of Ammonia Market
Global ammonia demand expected to reach 700 million metric tons by 2050

Global ammonia demand

New markets (around 400
million metric tons by 2050)
 Power generation
 Hydrogen carriers
 Shipping
Existing markets (around 300
million metric tons by 2050)
 Other existing uses
 Fertilizers applications

Source：IRENA Innovation Outlook Ammonia 2022

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Development-Focus Businesses

Fuel Ammonia Value Chain Goals
Leveraging technological prowess across entire value chain
and aiming to expand revenues and maximize earnings
upstream, midstream, and downstream
Manufacturing

Storage 貯蔵・輸送
and transportation

Utilization

Ammonia production technologies

Ammonia receiving and storage
technologies

Ammonia combustion technologies

Blue ammoniaBoilers
Natural gas

CCS/EORNH3Ammonia
synthesis
RenewableenergyShipping
terminal

NH3

NH3Marinetransport

Receivingterminal

Waterelectrolyzers

NH3Green ammonia

Gas turbines

Powergeneration

Land engines

Industrial
use

Vessel engines

Maritime
use

NH3

Fuel supply business

Fuel handling business

Equipment supply and afterservice business

Build value chain with global partners
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Development-Focus Businesses

Progress with Ammonia Value Chain Businesses
Utilization

Production
Initiated study
with ENOC toexplore feasibilityof Dubai’s firstgreen ammonia
production andsales project

UtilizationJoined with Adani tolaunch combustion
trials deploying
ammonia combustion
technology at thermal
power plants in India

Undertook
ammonia co-firing
tests at JERA's
Hekinan Thermal
Power Station

Fuel ammonia value chain
business sales

Storage andshipping

Agreed with Vopak to
jointly study lowcarbon ammonia
terminal development
and operation

Production
Began exploring
Indonesian green
ammonia production
and co-firing businesswith Pupuk

Billions yen

Production

Partnered with ACME
to explore green
ammonia production
and sales business inOman

Utilization

500

Agreed with GE
to develop largeammonia-firedgas turbine

Production

Reached basic
agreement withACME on supplying
green ammonia
from India to Japan

Utilization
Agreed with
PETRONAS unit tocommerciallydemonstrate world’s
first ammonia-fired gas
turbine in Malaysia
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Production

0

FY2023
Utilization

FY2030Partnered with Sembcorp
Industries, and GE Vernova
to explore ammonia
combustion facilities
retrofitting at Sembcorp's
gas-fired Sakra Power Plant
on Singapore’s Jurong
IslandFY2040FY2050Began looking to invest
in Australian green
ammonia production
and sales in Australia
thorough joint ventureof four Japanese andAustralian companies

Utilization
Finished ammonia andbiomass combustion
feasibility study with
Malaysia’s TNB Power
Generation todecarbonize its coalfired power stations

22

Looking beyond “Group Management Policies 2023”

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23

By integrating, uniting, and enhancing the diverse technologies as
the sources of our value, we forge new value for our customers
moving beyond traditional products and services
Technology is the cornerstone of everything we do and the value we deliver.
It spans everything from the regular to the revolutionary. We enhance thestrength and value of our technologies by strategically combining them.
Historically, we have focused on delivering value through products. In comingyears, we will concentrate more on value itself, seamlessly aligning it withwhat our customers seek. We remain committed to forging meaningfulconnections with the value we provide.

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The IHI Group creates Value Chains

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Appendix

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Appendix 1: Previous Disclosure Materials
 Business Area Briefings (on September 27, 2023)
Resources, Energy & Environment
Social Infrastructure
Industrial Systems & General-Purpose Machinery
Aero Engine, Space & Defense

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27

Appendix 2: Links for Sources (some in Japanese only)
P.11*1 Maritime Self-Defense Force website*2 Maritime Self-Defense Force website*3 Air Self-Defense Force website*4 AIRBUS*5 Wikimedia Commons*6 Air Self-Defense Force website*7 GE Vernova*8 Wikimedia Commons

https://www.mod.go.jp/msdf/equipment/ships/ddh/izumo/
https://www.mod.go.jp/msdf/equipment/rotorcraft/patrol/sh60k/
https://www.mod.go.jp/asdf/equipment/sentouki/F-15/index.html
https://mediacentre.airbus.com/element?id=542614
https://commons.wikimedia.org/wiki/File:Boeing_SUGAR_Volt_concept_aircraft_2010.jpg
https://www.mod.go.jp/asdf/equipment/other/Patriot/index.html
https://www.gevernova.com/gas-power/products/gas-turbines/lm2500
https://commons.wikimedia.org/wiki/File:CT7_T700_P1220751.jpg（Copyright: David Monniaux ）P.14*1 Air Self-Defense Force website*2 Maritime Self-Defense Force website*3 Air Self-Defense Force website*4 Ministry of Defense website

https://www.mod.go.jp/asdf/equipment/other/Patriot/index.html
https://www.mod.go.jp/msdf/equipment/ships/ddh/izumo/
https://www.mod.go.jp/asdf/equipment/sentouki/F-15/index.html
https://www.mod.go.jp/j/policy/defense/nextfighter/index.html

P.16*1 Based on Medium-Term Defense Program (FY2019~FY2023) and Defense Build-Up Program*2 Maritime Self-Defense Force website
https://www.mod.go.jp/msdf/release/202211/20221121-1.pdf*3 Northrop Grumman
https://wpcontent.ot5o9s93syrb.net/wp-content/uploads/GEOStar-1-DS-64.pdf*4 Cabinet Office website
https://www8.cao.go.jp/cstp/anzen_anshin/20221021_meti_3.pdf
P.18*1 Ministry of Defense website

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https://www.mod.go.jp/j/policy/defense/nextfighter/index.html

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Forward-looking figures shown in this material with respect to IHI’s performance outlooks and other matters are basedon currently available information, and therefore contain risks and uncertainties. Consequently, you should not place
undue reliance on these performance outlooks in making investment decisions. Actual results could differ materiallyfrom those discussed in these performance outlooks due to several important factors. They include politicalenvironments in areas in which IHI operates, general economic conditions, and the yen exchange rate including its
rate against the US dollar.