Results for the Six Months Ended September 30, 2023
Management Review
November 7, 2023

Hiroshi Ide, President and Chief Executive OfficerCopyright © 2023 IHI Corporation All Rights Reserved.

Contents• Impact of Additional PW1100G-JM Inspection Program• Group Management Policies 2023 Initiatives• Resource Allocations and Management Objectives

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Overview of Impact of Additional PW1100G-JM Inspection Program⚫ Surging maintenance frequency for Pratt & Whitney-manufactured
components made of powder metallurgy materials for PW1100G-JM jet
engine owing to policy of repeated inspections and shortened service lives⚫ Total costs for the entire program, including compensation to customers andadditional maintenance expenses, should be around $7 billion.
⚫ IHI will post full program share of about 15%, including future maintenancecosts, in current fiscal year.

⚫ Collaborate with program partners to boost overall maintenance capacity,
IHI will reduce impact of issue, and alleviate impact on customer operations
to restore confidence.
⚫ While program may temporarily depress earnings, long-term impact on
profitability of civil aero-engine business should be limited.
⚫ Continuing to position as growth business, and IHI will keep investing andundertaking measures to deliver world-leading production efficiency.
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Impact of Additional PW1100G-JM Inspection Program:Business Growth⚫ With global demand for aircraft poised to steadily expand, IHI participates in programs todevelop and mass-produce best-selling engines all classes, from small through large andsuper-large models.
⚫ Cumulative sales exceeding 3,000 units for PW1100G-JM, second-generation small tomedium-sized engine for volume zone, with spare parts demand expected to rise

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Group Management Policies 2023 Initiatives:
Aero Engine, Space & Defense⚫ Boost production and enhance profitability to cater growing aviation demand⚫ Expand defense and space businesses to meet growing needs safety and security needs

Participating in international next-generation fighter development
programSM-3 Block ⅡA ballistic missile developed by
Japan and United States

Computer-generated image courtesy of Ministry of Defense
Image courtesy of Ministry of Defense

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Group Management Policies 2023 Initiatives:
Resources, Energy & Environment⚫ Final new power plant boiler installation progressing smoothly, and IHI have received
string of orders for gas turbine power generation construction work that should contributeto life cycle business.
⚫ In thermal power field, looking to expand life cycle business by monitoring customers’
operating data and converting fuel⚫ Expanding nuclear power business after fiscal 2025, including for restarts,
decommissioning, and small modular reactors

Power plant remote monitoring

Entering small modular reactor market by investingin NuScale Power, LLC

Envisaged facility when completed

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Group Management Policies 2023 Initiatives:
Social Infrastructure⚫ Large bridge construction projects progressing well in Romania, Bangladesh, India, andother overseas locations⚫ Undertaking maintenance projects (including for Daishi Bridge replacement and Second
Bosphorus Bridge rehabilitation project) and expanding Bridge Management Support
System projects⚫ Utsunomiya Light Rail trains contributing to new urban development

Braila Bridge in Romania

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Utsunomiya Light Rail train

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Group Management Policies 2023 Initiatives:
Industrial Systems & General-Purpose Machinery⚫ Unit production of vehicular turbochargers has steadily recovered.
⚫ Have secured new orders from leading overseas automakers⚫ Demand in heat treatment and surface engineering businesses expanding for medical,aerospace, decorative, fuel cell separator, and semiconductor applications⚫ Expanding product lineup and strengthening product competitiveness in compressor
business, which should grow on need to lower environmental impact and rising demandfor hydrogen, ammonia, and other gases
Vehicular turbocharger

Thermal and heat treatment
Four globally competitive Group companies
Heat treatment
Equipment
Process-ingservices

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Vacuum heattreatment furnaces
and hot presses

No. 1 in Japan, no.4 in world

Surface engineering(Acquired in 2008) World no.1

(Acquired in 2015)

No.4 in Germany(Acquired in 2012)

World no.28

Resource Allocations and Management Objectives
Managementtargets

Resourceallocations
While retaining policy of allocating investments
centering on growth and development-focus
businesses, IHI will keep to cutting costs andreassess investment priorities.

Fiscal 2025 management targets
unchanged
Completed one-time posting for
PW1100G-JM-related expenses in fiscal
2023
FY2025

PW1100G-JMrelated impact

Operating cash flow forecasts(Billions of yen)

Operating profit margin
ROIC (after tax)

1,000
100

7.5%
8% or higher

Cash Conversion Cycle

100 days(Reference) Revenue

1.7 trillion yen

ROIC (after tax) = (Operating profit + Interest and dividend income) after tax /(Equity attributable to owners of parent + Interest-bearing liabilities)
Cash Conversion Cycle = Working capital / Revenue x 365 days

Shareholder
returns
Fiscal 2023 dividend forecast unchanged

0FY2020

FY2021

FY2022

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FY2023

FY2024FY2025

Targeting consolidated dividend payout
ratio of 30% in line with basic policy ofdelivering stable dividends
9Links for Sources on slide 4*1 https://www.geaviation.com/commercial/engines/ge90-engine*2 https://www.geaviation.com/commercial/engines/genx-engine*3 https://www.mtu.de/engines/commercial-aircraft-engines/narrowbody-and-regional-jets/v2500/*4 https://www.geaerospace.com/propulsion/commercial/cf34*5 https://www.geaviation.com/commercial/engines/ge9x-commercial-aircraft-engine*6 https://www.mtu.de/maintenance/commercial-aircraft-engine-services/engine-portfolio-mro/narrowbody-and-regional-jets/pw1100gjm/*7 https://www.ihi.co.jp/all_news/2016/aeroengine_space_defense/1190378_1652.html

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10Forward-looking figures shown in this material with respect to IHI’s performance outlooks and other matters are based on management’s
assumptions and beliefs in light of the information currently available to it, and therefore contain risks and uncertainties. Consequently, you should
not place undue reliance on these performance outlooks in making judgments. IHI cautions you that actual results could differ materially fromthose discussed in these performance outlooks due to a number of important factors. These important factors include political environments inareas in which IHI operates, general economic conditions, and the yen exchange rate including its rate against the US dollar.