#1Financial Results for FY2020 For the Year ended March 31, 2021 May 11, 2021 Financial Acc Accouting Standards Kawasaki Heavy Industries, Ltd. KR Kawasaki FASF MEMBERSHIP Powering your potential#20 Table of Contents 1 Consolidated Results for FY2020 Summary Segment 3 Details by segment 3 Aerospace Systems 15 Income Statement Details of Change in Profit Balance Sheet 4559 Energy System & Plant Engineering 19 Precision Machinery & Robot 23 7 Ship & Offshore Structure 27 Rolling Stock 31 Cash Flows 11 Motorcycle & Engine 35 Energy Solution & Marine Engineering 39 2 Forecasts for FY2021 4 Shareholder Return and others Summary Segment 13 14 Shareholder Return Project Topics ESG Topics Appendix 43 44 46 47 Figures recorded in the business forecasts are forecasts that reflect the judgment of the Company based on the information available at the time of release and include risks and uncertainties. Accordingly, the Company cautions investors not to make investment decisions solely on the basis of these forecasts. Actual business results may differ materially from these business forecasts due to various important factors resulting from changes in the external environment and internal environment. Important factors that may affect actual business results include, but are not limited to, economic conditions, the yen exchange rate against the U.S. dollar and other currencies, the tax system, and laws and regulations. © Kawasaki Heavy Industries, Ltd. All Rights Reserved Kawasaki Powering your potential 2#31 Consolidated Results for FY2020 -Summary- Sales and income decreased significantly due to the impact of COVID-19 Net income decreased due to impairment loss and other factors (Billion Yen) Net Sales (billion yen) FY2020 Change vs. FY2019 FCST in Mar. Actual FY2019 FCST in Mar. 1,519 1,574 1,595 1,641 1,488 Orders Received 1,513.5 1,360.0 1,402.4 - 111.0 + 42.4 Net Sales 1,641.3 Operating Income (Loss) 62.0 [margin] [3.7%] Recurring Profit (Loss) 40.4 [margin] [2.4%] Net Income (Loss) 18.6 Attributable to Owners Parent [margin] [1.1%] Before-tax ROIC 4.2% 1,500.0 - 5.0 [-0.3%] - 4.0 [-0.2%] - 23.0 [-1.5%] 1,488.4 - 5.3 [-0.3%] - 2.8 [-0.1%] - 19.3 [-1.2%] - 1.0% 152.8 11.6 - 67.3 [-4.1pt] 0.3 [-0.0pt] FY'16 FY'17 FY'18 FY'19 FY'20 - 43.2 + 1.2 [-2.6pt] [+ 0.1pt] - 37.9 + 3.7 Operating Income (billion yen) Margin 64.0 62.0 [-2.4pt] [+0.2pt] 55.9 45.9 - 5.2pt Weighted-average 108.94 - 105.29 - 3.65 exchange rates (USD/JPY) 4.0% 3.5% 3.7% 3.0% US dollar-based transaction (B$) 2.00 - 1.61 - 0.39 Amount in foreign currency calculated by deducting dollar-denominated purchases from dollar-denominated sales of Kawasaki Heavy Industries, Ltd. (to include dollar-denominated sales of loss provisions). The estimated impact on operating income due to a 1 yen fluctuation in the exchange rate. See page 48 for the breakdown of these figures by segment. © Kawasaki Heavy Industries, Ltd. All Rights Reserved FY'16 FY'17 FY'18 FY'19 FY 20 -5.3 -0.3% Kawasaki Powering your potential 3#4Consolidated Results for FY2020 1 -Segment- Sales and income decreased significantly in Aerospace Systems, which used to contribute most Income increased significantly in Motorcycle & Engine due to an increased sales of off-road models in North America and reductions of fixed costs (2) 1 (Billion Yen) Orders Received Net Sales Operating Income (Loss) FY2019 FY2020 Change FY2019 FY2020 Change 1 FY2019 FY2020 Change 1 Aerospace Systems 414.9 329.5 - 85.4 532.5 377.7 - 154.8 42.7 - 31.6 - 74.4 Energy System & Plant Engineering 252.3 219.0 - 33.3 242.9 240.1 2.8 17.5 13.4 - 4.1 Precision Machinery & Robot 218.8 259.4 + 40.5 217.3 240.8 + 23.4 12.2 14.0 + 1.8 Ship & Offshore Structure 56.2 98.1 + 41.8 71.6 79.4 + 7.7 - 0.6 - 3.0 2.4 Rolling Stock 125.7 77.0 - 48.7 136.5 133.2 - 3.3 - 3.8 - - 4.5 0.7 2 Motorcycle & Engine 337.7 336.6 1.0 337.7 336.6 1.0 - 1.9 11.7 + 13.7 Others 107.5 82.5 - 24.9 102.4 80.4 22.0 1.2 0.4 0.7 Eliminations and corporate? - 5.3 - 5.7 0.3 Total 1,513.5 1,402.4 - 111.0 1,641.3 1,488.4 - 152.8 62.0 - 5.3 67.3 "Eliminations and corporate" includes some expenses incurred at Head Office which were not allocated to each industry segment for internal reporting © Kawasaki Heavy Industries, Ltd. All Rights Reserved Kawasaki Powering your potential 4#51 Consolidated Results for FY2020 -Income Statement- (Billion Yen) Details FY2019 FY2020 Change % % Net Sales 1,641.3 100.0 1,488.4 100.0 152.8 Cost of sales 1,370.8 83.5 1,297.3 87.2 - 73.4 Gross profit 270.5 16.5 191.1 12.8 79.3 Selling, general and administrative expenses 208.4 12.7 196.4 13.2 11.9 Salaries and allowances 56.6 56.9 + 0.3 1 Research and development expenses 52.6 44.9 7.6 2 Others 99.2 94.5 4.6 Operating Income (Loss) 62.0 3.8 - 5.3 - 0.4 67.3 Non-operating Income / Expenses - 21.6 2.4 + 24.0 (3 Gain and loss on foreign exchange - 8.4 4.0 + 12.5 Net Interest expense (incl. dividend income) Equity in income of - 2.6 - 0.9 + 1.6 4 unconsolidated subsidiaries and affiliates 1.2 0.4 - 0.8 5 Payments for the in-service issues 11.5 + 11.5 of commercial aircraft jet engines Reversal of payments for the in-service issues of commercial aircraft jet engines 6 3.3 + 3.3 Others 0.2 - 4.3 4.1 Recurring Profit (Loss) 40.4 2.5 - 2.8 - 0.2 43.2 © Kawasaki Heavy Industries, Ltd. All Rights Reserved 1 Reduction of hydrogen related costs (¥5.8bn) 2 Reduction of sales promotion costs and travel expenses 3 Yen/US$ rate 108.83 March 31, 20 110.72 March 31,'21 ④ Improvement in NACKS and DACKS (ship & offshore) Deterioration in Medicaroid ⑤ Decrease in payments for the in-service issues of Trent 1000 Reversal of payments for the in-service issues of Trent1000 Kawasaki Powering your potential 5#61 Consolidated Results for FY2020 -Income Statement- (Billion Yen) Change Details FY2019 FY2020 % % Recurring Profit (Loss) 40.4 2.5 - 2.8 - 0.2 Extraordinary Income / Losses - 1.1 - 11.8 - 10.7 7 Gain on sales of fixed assets 1.2 3.2 + 1.9 Gain on sales of shares 8 of subsidiaries and affiliates 1.5 + 1.5 9 Loss on business withdrawal - 2.3 + 2.3 10 Impairment loss - 15.2 + 15.2 Loss on valuation of shares (11) of subsidiaries and affiliates Income before income taxes - 1.4 + 1.4 39.3 2.4 - 14.6 - 1.0 - 54.0 (12) 12 Income taxes 19.0 2.7 16.2 Net income attributable to non-controlling interests 1.6 1.8 0.2 Net income (Loss) attributable to owners of parent 18.6 1.1 - 19.3 - 1.3 37.9 © Kawasaki Heavy Industries, Ltd. All Rights Reserved 43.2 ⑦ Sale of former dormitory /company housing sites 8 Certain affiliated company related to Energy System & Plant Engineering 9 Certain businesses by Energy System & Plant Engineering 10 Sakaide Works (Ship & Offshore structure) ¥4.0bn All fixed assets Hyogo & Harima Works (Rolling stock) ¥11.1bn Partial fixed assets 11 An overseas affiliate (Motorcycle & Engine) 12 Partial reversal of deferred tax assets FY'19 ¥7.5bn Kawasaki Powering your potential 6#7Consolidated Results for FY2020 1 -Details of change in profit- Reduction of SG&A expenses covered some of the impact of COVID-19 The impact of COVID-19 primarily affected Aerospace System (70% of ¥54.2bn) FY2019 Operating Income -54.2 62.0 - ¥67.3 billion yen Impact of COVID-19* FY2020 Operating Loss Effects of foreign exchange rates -6.1 Change in Sales Change in selling, general and administrative expenses -5.3 -13.7 11.9 -5.2 Change in product mix and other factors This figure is an approximate value that aggregates profit and loss fluctuations that are clearly attributable to the spread of COVID-19 in the FY2020, assuming the FY2019 results as a normal value © Kawasaki Heavy Industries, Ltd. All Rights Reserved Kawasaki Powering your potential 7#81 Consolidated Results for FY2020 -Details of change in profit- FY2019 Details of change Operating (Billion Yen) FY2020 Operating Income Impact of Effects of (Loss) COVID-19* FX rates* Change in sales* Change in product mix and other factors* Change in SG & A expenses Total Income (Loss) Aerospace Systems 42.7 - 39.7 - 2.4 - 19.4 - 13.7 0.8 - 74.4 - 31.6 Energy System & 17.5 - 3.8 - 0.1 - 0.6 - 1.2 1.6 - 4.1 13.4 Plant engineering Precision Machinery & Robot 12.2 1.2 - 0.9 4.7 - . 3.6 0.4 1.8 14.0 Ship & Offshore Structure - 0.6 - 0.1 0.9 - 3.9 0.7 - 2.4 - 3.0 Rolling Stock - 3.8 - 6.4 - 0.1 - 0.3 5.9 0.2 - 0.7 4.5 Motorcycle & Engine - 1.9 - 5.5 - 2.4 1.0 13.3 7.3 13.7 11.7 Others 1.2 - 0.1 - 1.6 1.0 - 0.7 0.4 Eliminations and corporate - 5.3 - 0.1 - 0.2 - 0.3 - 5.7 Total 62.0 - 54.2 - 6.1 - 13.7 - 5.2 11.9 - 67.3 - 5.3 The impact of the COVID-19, Effects of foreign exchange rates, change in sales, and change in product mix are approximate values calculated by our company based on certain criteria. In addition, each factor of change is often indivisible, and in particular, it may be desirable to check the change in sales and change in product mix. © Kawasaki Heavy Industries, Ltd. All Rights Reserved Kawasaki Powering your potential 8#91 Consolidated Results for FY2020 -Balance Sheet- (Billion Yen) + 20.5 Details 1 Preparation for unforeseen events due to COVID-19 End of End of Change Mar. 2020 % Mar. 2021 % 1 Cash and deposits 106.1 126.7 2 Trade receivables 473.2 460.4 - 12.7 3 Inventory 631.6 658.5 + 26.8 Other current assets 47.8 39.7 - 8.0 Current assets 1,258.7 64.3 1,285.4 65.5 + 26.6 4 Tangible & intangible fixed assets 503.9 473.6 - 30.2 Deferred tax assets 70.5 70.4 0.1 Other non-current assets 124.5 133.7 + 9.1 Non-current assets 699.0 35.7 677.8 34.5 - 21.1 Total assets 1,957.8 100.0 1,963.2 100.0 + 5.4 Tangible & intangible fixed assets (Bil Yen) - Turnover of tangible & intangible fixed assets Inventory (Bil Yen) Turnover of inventory 495.9 502.4 503.9 504.7 477.1 473.6 484.8 ② Decrease of Sales mainly in Aerospace Systems despite progress of receivable collection mainly in Motorcycle & Engine 3 Increase in inventories in Aerospace Systems due to the impact of COVID-19 4 Sale 658.5 631.6 592.8 3.13 3.11 3.18 3.17 3.17 3.25 3.14 2.69 2.59 2.26 FY17/3 FY18/3 FY19/3 FY20/3 FY21/3 FY17/3 FY18/3 FY19/3 FY20/3 FY21/3 © Kawasaki Heavy Industries, Ltd. All Rights Reserved of former dormitory /company housing sites and impairment loss of Sakaide, Hyogo and Harima works Kawasaki Powering your potential 6#101 Consolidated Results for FY2020 -Balance Sheet- End of End of (Billion Yen) Details Change Mar. 2020 % Mar. 2021 % 1 Trade payables Interest-bearing debt 371.6 355.1 16.5 2 567.4 593.3 + 25.8 Advances received 148.6 153.2 + 4.6 Provision for losses on construction contracts 11.4 14.2 + 2.7 Provision for the in-service issues of commercial aircraft jet engines Other liabilities 15.6 5.9 - 9.7 371.3 358.4 - Total liabilities 1,486.2 75.9 1,480.5 75.4 Total shareholders' equity 485.5 465.4 I 12.9 5.7 20.0 (1) Due to a decrease in sales 2 Preparation for unforeseen events due to COVID-19 ③ Unrecognized actuarial gains and losses improved due to higher stock prices (remeasurements of defined benefit plans +\18.9bn) 3 Other net assets - 13.9 17.3 + 31.2 Total net assets Total liabilities & net assets 471.5 1,957.8 24.1 100.0 482.7 1,963.2 100.0 24.6 + 11.2 + 5.4 Short-term debt (Bil Yen) Net D/E Ratio Long-term debt (Bil Yen) 787.6 800 711.9 695.6 601.8 595.4 541.1 600 439.4 400 142.4% 119.1% 104.4% 200 760.6 *Cash Conversion Cycle 732.7 729.4 (day) 593.3 567.4 End of FY'16 101 155.3% 142.9% 135.4% 141.6% End of FY'17 101 119.9% 126.8% 101.2% 100.2% End of FY'18 111 76.6% End of FY'19 133 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q End of FY'20 153 FY2018 FY2019 FY2020 © Kawasaki Heavy Industries, Ltd. All Rights Reserved Kawasaki Powering your potential 10#111 Consolidated Results for FY2020 -Cash Flows- Income before income taxes Depreciation and amortization Increase and decrease in working capital Trade receivables (minus notation indicates incr.) Inventory (minus notation indicates incr.) Trade payables (minus notation indicates decr.) Advance Payment (minus notation indicates incr.) Advances received (minus notation indicates decr.) Other Cash flows from operating activities Purchase of tangible and intangible fixed assets Proceeds from sales of tangible and intangible fixed assets Other Cash flows from investing activities Free cash flows Net increase and decrease in debt and bonds (minus notation indicates decr.) Dividends paid (Except payment to non-controlling interests) Proceeds from sale and leaseback transactions Other Cash flows from financing activities © Kawasaki Heavy Industries, Ltd. All Rights Reserved (Billion Yen) Change Details FY2019 FY2020 39.3 - 14.6 54.0 61.2 - 120.9 61.2 - 15.8 0.0 + 105.1 1 - 46.7 23.2 + 70.0 - 48.0 - 26.3 + 21.6 2.4 - 16.7 19.1 3.3 - 0.1 3.4 - 31.8 4.2 + 36.0 4.8 3.8 - 1.0 - 15.4 34.6 + 50.0 - 71.9 6.0 - 51.6 + 20.2 2 13.6 + 7.5 - 3.5 0.6 + 4.1 - 69.4 - 37.3 + 32.0 - 84.8 - 2.7 + 82.0 3 129.1 16.6 112.5 - 11.7 (4) - 0.0 + 11.6 10.0 + 10.0 - 1.6 115.8 - 3.4 - 1.8 23.0 92.7 1 FY'19 Deteriorated after the liquidation of receivables in the end of FY'18 FY'20 Progress of receivable collection while the sales decreased ② Sale of former dormitory / company housing sites 3 FY'19: Compensation of free cash flow deficits and increased borrowing in preparation for unforeseen events due to COVID-19 ④4 Forewent a year-end dividend for the FY'19 or an interim dividend for the FY'20 Kawasaki Powering your potential 11#121 Consolidated Results for FY2020 -Cash Flows- Cash flow from operating activities deteriorated due to increase of working capital (Business expansion did not sufficiently contribute to net income) One of the reasons is expansion of jet engine business, which requires a long payback period ICF from operating acitivities ICF from investing activities Working capital -O-FCF (billion yen) 800 (net income attributable to owners of parent) (-14.6) 700 (46.1) (39.3) 598.8 625.2 600 (37.8) (48.7) 524.9 (61.3) (84.2) (74.8) (32.9) (38.8) 486.6 500 456.9 459.1 449.5 427.6 436.4 419.2 400 300 200 84.7 100 28.1 0 -100 -200 FY2011 151.7 127.6 109.7 86.0 93.5 56.0 34.6 -15.4 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 © Kawasaki Heavy Industries, Ltd. All Rights Reserved Kawasaki Powering your potential 12#132 Earnings Forecasts for FY2021 -Summary- Significant increase in orders, sales and profits are expected due to mitigating of the impact of COVID-19 Impairment loss on fixed assets to be acquired in Sakaide Works is recorded under extraordinary profit and loss (Billion Yen) Negative impact of approx. ¥100 billion decrease due to application of new Accounting Standard for Revenue Recognition FY2020 Actual FY2021 Forecast Change Details of Change in Operating Income (billion yen) Orders Received 1,402.4 1,480.0 + 77.6 Net Sales 1,488.4 1,500.0 + 11.6 Operating Income (Loss) [Margin] - 5.3 [-0.3%] 30.0 + 35.3 [2.0%] [+ 2.3pt] Eliminations and corporate Motorcycle & Engine Others 2.2 Rolling Stock 1.6 5.3 7.5 -6.8 2.0 Recurring Profit (Loss) [Margin] - 2.8 [-0.1%] 20.0 + 22.8 [1.3%] [+ 1.5pt] Net Income (Loss) - 19.3 17.0 + Attributable to Owners Parent [Margin] Before-tax ROIC [-1.2%] - 1.0% [1.1%] 36.3 [+2.4pt] Precision Machinery & Robot Energy Solution & Marin Engineering 30.0 2.5% + 3.5pt Aerospace Systems Weighted-average 105.29 106.00 + 0.71 23.6 exchange rates (USD/JPY) US dollar-based transaction (B$) 1.61 1.61 *Amount in foreign currency calculated by deducting dollar-denominated purchases from dollar- denominated sales of Kawasaki Heavy Industries, Ltd. (to include dollar-denominated sales of loss provisions). The estimated impact on operating income due to a 1 yen fluctuation in the exchange rate. See page 48 for the breakdown of these figures by segment. © Kawasaki Heavy Industries, Ltd. All Rights Reserved FY2020 -5.3 FY2021 Kawasaki Powering your potential 13#142 Forecasts for FY2021 -Segment- Aerospace Systems will improve profitability, but the situation will remain difficult ① Motorcycle & Engine will enjoy increase of both sales and profits due to the recovery in demand for motorcycles and the continued demand for off-road models in the North America ② (Billion Yen) Operating Income (Loss) FY2020 FY2021 Orders Received Net Sales FY2020 FY2021 Change FY2020 FY2021 Change Change 1 Aerospace Systems 329.5 310.0 - 19.5 377.7 1340.0 - 37.7 - 31.6 18.0 + 23.6 Rolling Stock 77.0 70.0 7.0 133.2 150.0 + 16.8 - 4.5 3.0 + 7.5 Energy Solution & 317.1 400.0 + 82.9 319.5 320.0 + 0.5 10.3 3.5 6.8 Marine Engineering Precision Machinery & Robot 259.4 260.0 + 0.6 240.8 250.0 + 9.2 2 14.0 16.0 + 2.0 2 Motorcycle & Engine 336.6 380.0 + 43.4 336.6 380.0 + 43.4 11.7 17.0 + 5.3 Ohters 82.5 60.0 - 22.5 80.4 1 60.0 - 20.4 0.4 2.0 + 1.6 Eliminations and corporate X2 - 5.7 - 3.5 + 2.2 Total 1,402.4 1,480.0 + 77.6 1,488.4 1,500.0 + 11.6 - 5.3 30.0 + 35.3 1 The application of the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) is expected to have a negative impact of approximately ¥73 billion on net sales and ¥10 billion on operating income *2 "Eliminations and corporate" includes some expenses incurred at Head Office which were not allocated to each industry segment for internal reporting © Kawasaki Heavy Industries, Ltd. All Rights Reserved Kawasaki Powering your potential 14#153 Details by Segment -Aerospace systems- FY2020 (vs. FY2019) Orders received Net Sales Operating income Decreased due to a decrease in component parts for commercial aircrafts and component parts for commercial aircraft jet engines, despite an increase in aircrafts for MOD Decreased due to a decrease in aircrafts for MOD, component parts for commercial aircrafts and component parts for commercial aircraft jet engines Deteriorated due to a decrease in revenue and other factors FY2021 (vs. FY2020) Orders received Net Sales Decreased due to a decrease in component parts for commercial aircrafts and component parts for commercial aircraft jet engines Same as above Operating Income Increased due to an improvement in the profitability of jet engine business along with the recovery of operating hours and other factors' Orders received (billion yen) Net Sales (billion yen) FCST in Feb 330.0 498.9 431.6 414.9 329.5 310.0 532.5 469.5 463.9 Operating Income (billion yen) FCST in Feb 400.0 377.7 340.0 42.7 FCST in Feb -25.0 30.8 32.6 8.0 - 31.6 FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 © Kawasaki Heavy Industries, Ltd. All Rights Reserved Kawasaki Powering your potential 15#163 Details by Segment -Aerospace systems- (Billion Yen) FY2019 FY2020 FY2021 Actual FCST in Feb. Actual Chg. Vs. FY19 Chg. Vs. FCST Forecast Chg. Vs. FY20 Orders Received 414.9 330.0 329.5 85.4 0.5 310.0 19.5 Aerospace 244.5 230.0 236.2 8.3 + 6.2 240.0 + 3.8 Aero Engine 170.4 100.0 93.3 - 77.0 6.7 70.0 - 23.3 Net Sales 532.5 400.0 377.7 154.8 22.3 X 340.0 - 37.7 Aerospace 339.8 275.0 262.5 77.2 - 12.5 Aero Engine 192.7 125.0 115.1 77.5 9.9 265.0 + 75.0 2.5 40.1 Operating Income (Loss) 42.7 - 25.0 - 31.6 74.4 6.6 * - 8.0 + [Margin] [8.0%] [-6.2%] [-8.3%] [-16.4pt] [-2.0pt] [-2.3%] 23.6 [+6.0pt] Details of change in Operating Income(Loss) Appendix (billion yen) Impact of COVID-19 Number of aircraft component parts sold to Boeing Number of jet engine component parts sold 42.7 -39.7 FY'19 FY'20 Change FY'19 FY'20 Change Effects of foreign exchange rates 767 34 30 - 4 V2500 47 5 - 42 FY2020 -2.4 FY 2019 -19.4 777 44 24 -20 PW1100G 726 360 366 -31.6 777X 9 9 Change in Sales -13.7 0.8 Change in product mix and other factors Change in selling, general and administrative expenses Number of jet engine component parts sold to Rolls-Royce is not disclosed 787 167 77 - 90 *The application of the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) is expected to have a negative impact of approximately ¥73 billion on net sales and ¥10 billion on operating income © Kawasaki Heavy Industries, Ltd. All Rights Reserved Kawasaki Powering your potential 16#173 Details by Segment -Aerospace systems- Net Sales (billion yen) Aerospace Aero Engines 161.1 135.8 67.0 126.6 128.7 122.2 122.1 117.9 120.5 114.7 105.9 104.9 105.2 46.4 109.3 31.5 41.5 99.7 38.6 39.1 43.1 44.9 93.9 36.5 39.3 32.5 36.3 34.0 74.6 25.4 95.1 94.0 26.4 89.3 83.5 83.0 87.1 78.1 73.3 68.6 71.2 74.7 75.6 23.9 74.2 67.5 70.0 50.7 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2020 FY2018 FY2019 FY2017 Operating Income (billion yen) 22.2 13.8% 9.5% 10.0% 8.3% 8.9% 7.5% 6.0% 5.0% 11.8 10.9 3.4% 3.9% 11.3 3.9% 3.7% 10.8 7.9 7.7 5.3 4.8 4.8 4.2 4.1 © Kawasaki Heavy Industries, Ltd. All Rights Reserved 4.2% 17.5 - 6.3 - 6.7% 4.6 -12.4 - 12.4% - 23.4% Kawasaki Powering your potential 17#183 Details by Segment -Aerospace systems- Market Overview - - Commercial aircraft business Global passenger demand remained weak due to the impact of COVID-19, and demand for aircraft and aircraft jet engine business has been declining It will take a considerable amount of time for the market to recover to the same level as the conditions before COVID-19 However, jet engine business is expected to recover faster than aircraft business ● MOD aircraft business - - There is a certain demand within tight defense budget Stable orders are expected over the medium- and long-term Specific Efforts - ●工場全体の管理 Securing stable revenue in core business Cost reductions in existing orders of aircrafts for Boeing and commercial aircrafts jet engines Steady promotion of existing orders for MOD such as development and mass production Revising technology strategy in accordance with the change in marked trends Improving financial foundation Review of fixed cost structure Reduction of inventories through production innovation activities ・見える化で工場運営を最適化 生産状況表示 データ 0 4222 インターネット 工場内ネットワーク (2) モノの見える化 ・トレーサビリティー patrol aircraft "P-1" 5 aircrafts to be delivered in FY'21 在庫の最小化 © Kawasaki Heavy Industries, Ltd. All Rights Reserved (1) 人の見える化 デジタル作業指示の活用 ・設計情報とのダイレクト連携 人手作業のムダ徹底廃除 部品 組立 海外 協力会社 44.4% (3) 設備の見える化 ・予知保全でダウンタイムを最小化 ・設備のフル活用 Smart-K Project Hydrogen combustor (decarbonization technology) Kawasaki Powering your potential 18#193 Details by Segment - Energy System & Plant Engineering - FY2020 (vs. FY2019) Orders received Net Sales Operating income Decreased compared with FY2019, when orders were received for major repair work on domestic municipal waste incineration plants Decreased compared with FY2019, when overseas sales of chemical plants were recorded, despite an increase in sales of domestic municipal waste incineration plants and sales of domestic gas turbine combined cycle power plants Decreased due to decrease in sales, the occurrence of operation losses by the impact of COVID-19, and other factors FY2021 (vs. FY2020) See page 39 for the new segment "Energy solutions and Marine Engineering" Orders received (billion yen) FCST in Feb 220.0 Net Sales (billion yen) FCST in Feb 240.0 Operating Income (billion yen) 263.5 252.3 251.6 253.0 242.9 240.1 223.6 219.0 7.6 11.6 17.5 FCST in Feb 13.0 13.4 FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 © Kawasaki Heavy Industries, Ltd. All Rights Reserved Kawasaki Powering your potential 19#203 Details by Segment - Energy System & Plant Engineering - (Billion Yen) Chg. vs FY20 FY2019 FY2020 FY2021 Actual FCST in Feb. Actual Chg. vs FY19 Chg. vs FCST Forecast Orders Received 252.3 220.0 219.0 33.3 1.0 Net Sales 242.9 240.0 240.1 2.8 + 0.1 Operating Income 17.5 13.0 13.4 [Margin] [7.2%] [5.4%] [5.5%] 4.1 [-1.6pt] + 0.4 [+0.0pt] Details of change in Operating Income(Loss) 17.5 FY2019 Appendix See page 40 for the new segment "Energy solutions and Marine Engineering" (billion yen) Impact of COVID-19 Sales of major products in the energy business above components Sales of municipal waste incineration plants -3.8 Change in Sales \ Change in selling, general and administrative expenses below after-sales service Net sales -0.1-0.6 -1.2 1.6 Effects of foreign exchange rates Change in product mix and other factors 79.4 (billion yen) 79.0 70.8 68.8 55.2 65.8 47.5 46.7 41.6 37.9 13.4 O&M ratio to net sales (billion yen) 46.3 47.5 39.0 36.2 36.6 © Kawasaki Heavy Industries, Ltd. All Rights Reserved 53.2% 45.6% 44.2% 43.6% 31.5 27.9 29.2 35.9% 22.1 24.2 FY2020 FY'17 FY'18 FY'19 FY'20 FY'21 FY'17 FY'18 FY'19 FY'20 FY'21 Kawasaki Powering your potential 20#213 Details by Segment - Energy System & Plant Engineering - Net Sales (billion yen) 80.2 54.4 55.3 50.0 45.0 50.5 66.7 80.6 84.1 86.4 53.5 52.3 59.3 51.0 52.9 64.9 اسلا-اساس 3Q 4Q FY2020 3Q 4Q 1Q 2Q 11.9% FY2019 3Q 4Q 1Q 2Q FY2018 3Q 4Q 1Q 2Q 1Q 2Q FY2017 Operating Income (billion yen) 5.9% 8.4% 8.3% 7.9 5.6% 7.7% 5.8% 5.1% 3.9% 3.7% 3.5% 4.5 3.1% 4.2 1.8% 1.3% 0.4% 2.3 2.3 1.9 - 0.5 4.7 4.2 2.8 1.5 0.7 0.8 0.2 - 0.9% © Kawasaki Heavy Industries, Ltd. All Rights Reserved Kawasaki Powering your potential 21#223 Details by Segment - Energy System & Plant Engineering - Market Overview Domestic - Demand for major repair work on municipal waste incineration plants is expected to continue - Emerging countries Demand for distributed power plants and other energy infrastructure is expected to expand in the medium to long term The impact of COVID-19 Restrictions on movement of people with exception of China or certain developed countries may affect sales. and after-sales service activities Specific Efforts See page 42 for the new segment "Energy solutions and Marine Engineering" © Kawasaki Heavy Industries, Ltd. All Rights Reserved Kawasaki Powering your potential 22#233 Details by Segment - · Precision Machinery & Robot - FY2020 (vs. FY2019) Orders received Net Sales Operating Income و Increased due to an increase in hydraulic components for construction machinery, robots for semiconductor manufacturing equipment, and robots for automobile body assembly Same as above Increased due to an increase in revenue FY2021 (vs. FY2020) Orders received Net Sales Operating income Remained at the same level due to an increase in robots, despite a decrease in hydraulic components for construction machinery Increased as a whole due to an increase in robots, despite a decrease in hydraulic components for construction machinery Increased due to an increase in sales of robots, an improvement in profitability of robots, and other factors Orders received (billion yen) FCST in Feb 230.0 259.4 260.0 225.2 218.8 207.1 Net Sales (billion yen) FCST in Feb 230.0 Operating Income (billion yen) FCST in Feb 11.5 21.6 250.0 21.3 240.8 222.0 217.3 198.9 16.0 14.0 12.2 FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 © Kawasaki Heavy Industries, Ltd. All Rights Reserved Kawasaki Powering your potential 23#243 Details by Segment - Precision Machinery & Robot · - (Billion Yen) FY2019 FY2020 FY2021 Actual FCST in Feb. Actual Chg. vs FY19 Orders Received 218.8 230.0 259.4 + 40.5 Hydraulic 145.9 155.0 172.6 + + 26.7 + Chg. vs FCST 29.4 Forecast Chg. vs FY20 260.0 + 0.6 17.6 165.0 7.6 Components & Systems Robotics 72.9 75.0 86.7 + 13.8 + 11.7 95.0 + 8.3 Net Sales 217.3 230.0 240.8 + 23.4 + 10.8 250.0 + 9.2 Hydraulic 147.8 155.0 165.5 + 17.7 + 10.5 160.0 5.5 Components & Systems Robotics 69.5 75.0 75.2 + 5.7 + 0.2 90.0 + 14.8 Operating Income 12.2 11.5 14.0 + 1.8 + 2.5 16.0 + 2.0 [Margin] [5.6%] [5.0%] [5.8%] [+ 0.2pt] [+ 0.8pt] [6.4%] [+ 0.5pt] Details of change in Operating Income(Loss) Appendix (billion yen) Change in product mix and other factors Impact of COVID-19 -3.6 4.7 0.4 1.2 0.9 Change in Sales Effects of foreign exchange rates 12.2 Change in selling, general and administrative expenses 63.8 60.3 14.0 44.4 Sales of hydraulic components to China (billion yen) Sales of robots by segment* (billion yen) FY'21 FY'19 FY'20 Flat or FCST 88.1 Slightly Down Automobile assembly and painting 350 368 350 Semiconductor 190 238 250 manufacturing equipment general robots for 219 212 310 industrial use and others Total 760 819 910 FY2019 FY2020 FY'17 FY'18 FY'19 FY'20 FY'21 *Figures are before consolidation © Kawasaki Heavy Industries, Ltd. All Rights Reserved Kawasaki Powering your potential 24#253 - Details by Segment · Precision Machinery & Robot - Net Sales (billion yen) Hydraulic Components & Systems Robotics 86.6 mimimimi 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2017 FY2018 FY2019 FY2020 11.5% 10.9% 10.9% 10.1% 9.9% 9.9% 9.5% 9.4% 9.2% Operating Income (billion yen) 4.5 4.4 6.8 5.7 © Kawasaki Heavy Industries, Ltd. All Rights Reserved 6.4 5.3 5.0 4.5 8.5% 6.9 4.7 4.1% 3.6% 3.8% 2.9% 2.9% 2.0 2.0 1.7 1.4 1.3 6.8% 5.9 Kawasaki Powering your potential 25#26Details by Segment 3 - Precision Machinery & Robot - Market Overview • Construction machinery - - Demand is increasing in Chinese market, which has recovered rapidly from the impact of COVID-19 and has recorded the highest sales of hydraulic construction machinery World wide demand excluding China is currently on a clear recovery trend, despite stagnation due to the impact of COVID-19 Electrification will be promoted due to the environmental regulations Automation and autonomy will be promoted due to the decline of skilled workers Robots In the Chinese market, sales of general purpose robots for industrial use are rapidly recovering, although some projects were delayed by the impact of COVID-19 is In semiconductor markets, demand strong due to increased capital investment, and will expand over the medium to long- term Specific Efforts - - Developing electrification and automation technology for construction machinery Development and supply of the latest hydraulic equipment and systems for electrification and automation to support customers Promotion of open innovation Developing markets and complementing strengths by collaboration with other companies in the same and different industries Accelerating development and early launch of new products by collaboration with start-up companies Strengthening elemental technology for future products by collaboration with academia and government Kawasaki Robotics Competitors Collaboration Academia & government A Start-ups 旺旺 Different industries © Kawasaki Heavy Industries, Ltd. All Rights Reserved Ranber Kawasaki Powering your potential 26#273 Details by Segment - Ship & Offshore Structure - FY2020 (vs. FY2019) Orders received Net Sales Operating income Increased due to orders received for a submarine for MOD and other factors (orders for 4 LPG carriers in 'FY19 and 4 in FY'20) Increased due to an increase in a construction works of submarine for MOD and other factors Deteriorated due to the occurrence of operation losses and other factors, despite an increase in revenue FY2021 (vs. FY2020) See page 39 for the new segment "Energy solutions and Marine Engineering" Orders received (billion yen) FCST in Feb 100.0 Net Sales (billion yen) Operating Income (billion yen) FCST in Feb 80.0 FCST in Feb -3.5 4.7 81.1 56.2 98.1 95.6 78.9 79.4 71.6 - 3.8 1.0 - 0.6 - 3.0 FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 © Kawasaki Heavy Industries, Ltd. All Rights Reserved Kawasaki Powering your potential 27#283 Details by Segment - Ship & Offshore Structure - (Billion Yen) Chg. vs FY20 FY2019 Actual FY2020 FY2021 FCST in Feb. Actual Chg. vs FY19 Chg. vs FCST Forecast Orders Received 56.2 100.0 98.1 + 41.8 1.9 Net Sales 71.6 80.0 79.4 + 7.7 0.6 Operating Income (Loss) - 0.6 - 3.5 - 3.0 2.4 + 0.5 [Margin] [-0.8%] [-4.3%] [-3.7%] [-2.9pt] [+0.6pt] Details of change in Operating Income(Loss) See page 40 for the new segment "Energy solutions and Marine Engineering" (billion yen) Appendix Effects of foreign exchange rates FY2019 FY2020 -0.6 0.9 0.0 -0.1 Delivery year (number of ships) Order Backlog (billion yen) 191.6 FY'20 FY21 FY22 FY23~ Order Backlog Actual Scheduled LNG Carrier I 1 Impact of COVID-19 -3.0 99.1 101.6 104.6 85.9 Change in Sales -3.9 LPG Carrier 2 3 4 - 7 Submarine 1 Others 3 I 1 1 1 2 - - I Change in product mix and other factors Change in selling, general and administrative expenses © Kawasaki Heavy Industries, Ltd. All Rights Reserved 0.7 Total 60 3 LO 5 1 9 FY'16 FY'17 FY'18 FY'19 FY'20 Kawasaki Powering your potential 28#293 Details by Segment - Ship & Offshore Structure - Net Sales (billion yen) 25.3 24.9 25.6 22.0 19.7 17.6 23.3 15.9 22.8 23.6 22.1 18.6 17.5 15.8 16.0 14.2 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2018 FY2019 FY2020 FY2017 Operating Income 6.4% 6.1% (billion yen) 1.5 3.3% 2.1% 1.3 0.8 -0.0 0.5 - 2.8 - 9.2% 2.3 - 14.5% © Kawasaki Heavy Industries, Ltd. All Rights Reserved - 0.3% - 0.3 1.7% - 1.0 1.7 - 10.7% - 7.5% 4.3% 0.8% 0.6 -0.4 0.1 0.9 - 1.9% - 0.0 - 0.0% - 1.6 - 6.1% - 9.3% Kawasaki Powering your potential 29#303 Details by Segment - Ship & Offshore Structure - Market Overview ● Submarines & governmental ships - - Stable orders are expected Regular repairs will increase due to the extension of the lifespan • Commercial ships - - Demand for LNG fueled vessels increases as environmental regulations strengthen The situation remain severe, amid the limited availability of new projects due to the uncertainty of global economic trends Strict competition with shipyards in Korea and China makes it difficult to secure orders at profitable prices Specific Efforts See page 42 for the new segment "Energy solutions and Marine Engineering" © Kawasaki Heavy Industries, Ltd. All Rights Reserved Kawasaki Powering your potential 30#313 Details by Segment - Rolling Stock FY2020 (vs. FY2019) Orders received Net Sales Operating income - Decreased compared with FY2019, when major orders in domestic were received Decreased due to a decrease in passenger cars for U.S. Deteriorated due to a decrease in profit from overseas projects by the impact of COVID-19 in addition to decreased revenue FY2021 (vs. FY2020) Orders received Net Sales Operating income Decreased as a whole due to a decrease in the U.S., despite remaining at the same level in Asia and domestic Increased as a whole due to an increase in the U.S., despite a decrease in Asia and domestic Improved due to an increase in revenue and improvement in profitability Orders received (billion yen) 257.1 FCST in Feb 70.0 136.0 125.7 77.0 70.0 Net Sales (billion yen) FCST in Feb 140.0 150.0 141.7 136.5 133.2 124.6 Operating Income (billion yen) FCST in Feb -4.5 - 12.4 - 13.7 - 3.8 - 4.5 3.0 FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 © Kawasaki Heavy Industries, Ltd. All Rights Reserved Kawasaki Powering your potential 31#323 Details by Segment - Rolling Stock - - (Billion Yen) FY2019 FY2020 FY2021 Actual FCST in Feb. Actual Chg. Vs. FY19 Chg. Vs. FCST Forecast Chg. Vs. FY20 Orders Received 125.7 70.0 77.0 48.7 + 7.0 70.0 7.0 Domestic & Asia 119.9 61.5 66.2 53.7 + 4.7 67.0 + 0.8 North America 5.8 8.5 10.8 + 5.0 + 2.3 3.0 - 7.8 Net Sales 136.5 140.0 133.2 3.3 6.8 150.0 + 16.8 Domestic & Asia 97.5 113.5 107.5 + 10.0 6.0 99.0 8.5 North America 38.9 26.5 25.6 13.3 0.9 51.0 + 25.4 Operating Income (Loss) - 3.8 - 4.5 [Margin] [-2.7%] [-3.2%] - 4.5 [-3.3%] 0.7 [-0.6pt] 3.0 [2.0%] + 7.5 [+5.4pt] Details of change in Operating Income(Loss) FY2019 (billion yen) FY2020 -3.8 Impact of COVID-19 -4.5 0.2 -6.4 Effects of foreign +6 exchange rates Appendix Sales in components, overhaul and after-sales service (billion yen) 29.0 27.4 26.9 Change in selling, general and administrative expenses -0.1 -0.3 Change in Sales Change in product mix and other factors FY'19 FY'20 FY'21 © Kawasaki Heavy Industries, Ltd. All Rights Reserved Progress of the M9 Project for Long Island Rail Road in the United States (End of April 2021) 80 cars out of 202 were delivered KMM, the North American works, has started production of the last unit, and its delivery is scheduled for 1Q 2022 Kawasaki Powering your potential 32#333 Details by Segment - Rolling Stock Net Sales (billion yen) Domestic & Asia North America - 41.9 36.1 34.5 13.2 29.1 12.6 12.4 12.3 40.6 38.6 38.8 38.1 39.0 36.8 11.6 32.3 32.3 31.7 12.0 14.9 8.9 8.2 8.1 6.0 4.6 23.3 6.8 22.0 28.7 29.0 29.9 30.1 20.4 28.6 27.7 26.6 26.3 24.8 23.5 7.8 23.9 22.1 6.0 6.9 16.8 15.5 16.0 13.5 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2017 FY2018 FY2019 FY2020 9.1% 5.9% 0.0 3.3 -0.9- 0.9 0.0% - 3.2% 3.9% 3.1% - 0.8 - 0.6 1.2 1.4 1.2 - 3.5 3.2 2.1% - 1.7% - 3.5% - 4.5% 3.4% Operating Income (billion yen) - 35.3% © Kawasaki Heavy Industries, Ltd. All Rights Reserved 14.8 - 7.3 - 7.9 - 36.1% - 17.3% - 19.0% - 10.2% Kawasaki Powering your potential 33#343 Details by Segment - Rolling Stock Market Overview - The impact of COVID-19 - Review of railway related investment in domestic, delaying project schedule and postponement/ cancellation of bid in overseas are becoming reality ● Medium and long term forecast Stable growth is expected in the railway business, based on the needs of railway infrastructure to deal with the congestion mitigation and environmental measures in emerging countries © Kawasaki Heavy Industries, Ltd. All Rights Reserved Specific Efforts Compliance with delivery schedules for overseas projects Milestones of major projects Delivery of the first train to Dhaka Delivery of prototype train for R211 Delivery of final train for M9 FY2021 1Q FY2021 1Q FY2022 1Q Rolling stock for Dhaka Mass Transit Company Limited The first train has arrived at the local train depot and is undergoing maintenance work Subsequent trains are also being shipped, and field test is scheduled to be conducted after FY2021 2Q. Company-wide staffing U.S. works to streamline process and improve productivity and quality through the newly established North America Project Management Task Force Achieving quality levels trusted by customers Reduction of spoilage and repair costs Further promotion of Kawasaki Production System, and installation to U.S. works Expansion of components sales, after-sales service, and maintenance business First order for a remote track monitoring system for U.S. is expected in FY2021 1Q Kawasaki Powering your potential 34#353 Details by Segment - Motorcycle & Engine - FY2020 (vs. FY2019) Net Sales Operating income Remained at the same level due to a decrease in motorcycles for the Southeast Asia, the impact of strong yen and other factors, despite an increase in off-road vehicles for North America Increased due to reductions of fixed costs and sales promotion costs and other factors FY2021 (vs. FY2020) Net Sales Operating Income Increased due to recovery of demand for motorcycles, remaining demand for off-road model in North America, and replenishment of dealer inventories, which decreased excessively in the previous period Ĵ Increased due to an increase in revenue FCST in Feb Net Sales (billion yen) 330.0 380.0 356.8 331.6 337.7 336.6 Operating Income (billion yen) FCST in Feb 5.0 17.0 15.2 14.3 11.7 - 1.9 FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 © Kawasaki Heavy Industries, Ltd. All Rights Reserved Kawasaki Powering your potential 35#363 Details by Segment - Motorcycle & Engine - FY2019 FY2020 FY2021 (Billion Yen) Actual FCST in Feb. Actual Chg. Vs. FY19 Net Sales 337.7 330.0 336.6 1.0 + Chg. Vs. FCST 6.6 Forecast Chg. Vs. FY20 380.0 + 43.4 Motorcycles for 123.0 114.2 8.7 137.0 + developed contries 22.8 Motorcycles for 78.6 67.4 11.2 82.0 emerging market + 14.6 Utility Vehicles, ATVs & PWC 84.6 101.4 + 16.7 108.0 + 6.6 General-purpose 51.3 53.5 + gasoline engines 2.1 53.0 0.5 Operating Income (Loss) [Margin] - 1.9 [-0.5%] 5.0 [1.5%] 11.7 + 13.7 + [3.4%] [+4.0pt] 6.7 [+ 1.8pt] 17.0 + 5.3 [4.4%] [+0.9pt] Appendix (billion yen) Details of change in Operating Income(Loss) Change in selling, general and administrative expenses fixed cost Reduction FY2019 -1.9 -5.5 Impact of COVID-19 Wholesales of motorcycles by country of ¥10.4bn 7.3 Developed countries 12 FY'19 (Thousand units) FY'20 Change Emerging countries (Thousand units) FY'19 FY'20 Change Japan 19 16 -2 U.S. 55 54 -1 Brazil Thailand 8 9 + 0 10 6 -3 +13 FY2020 Canada 6 5 -1 Philippines 240 143 -96 Europe 74 58 -15 Indonesia 51 30 -21 1.0 Australia 11 4 China 25 -2.4 27 11 Change in product mix and other factors Others 11 Total 162 146 -15 Total 337 226 -111 Change in Sales Effects of foreign exchange rates © Kawasaki Heavy Industries, Ltd. All Rights Reserved Kawasaki Powering your potential 36#373 Details by Segment - Motorcycle & Engine - Net Sales (billion yen) 77.9 116.6 73.7 81.8 130.5 78.8 82.9 107.5 80.8 85.7 111.1 mlulutt 67.7 69.2 70.6 68.3 58.9 1Q 2Q 3Q 4Q 1Q 2Q FY2017 Operating Income (billion yen) - 4.9% 3.3 12.0 FY2018 3Q 4Q 14.4 1Q 2Q FY2019 3Q 4Q 1Q 2Q 3Q 4Q FY2020 9.8 8.8% 7.0 8.2% 0.9% 10.3% 11.0% 6.7% 5.6% 1.8% 2.3% 5.2 - 3.3 - 1.3 4.6 - 0.5 - 1.1 2.8 2.5 0.7 - 0.6% - 4.4% - 1.9% - 1.3% - 5.9 - 4.1% © Kawasaki Heavy Industries, Ltd. All Rights Reserved 10.0% Kawasaki Powering your potential 37#383 Details by Segment - Motorcycle & Engine - Market Overview • U.S. - - Retail market exceeds the level of the previous year due to rising demand for off- road models by the impact of COVID-19 Demand is expected to remain strong • Europe - - Retail market has recovered to the same level as the previous year despite a temporary impact of city-wide lockdown in countries in the spring in 2020 Southeast Asia Retail markets remain sluggish However, they are expected to recover in FY2021 Specific Efforts - - - - Strict control of fixed costs to slimming down Maintaining the level of fixed cost ratio reduced in FY 2020 while considering additional reductions Improvement in marginal rate of return Reduction of sales promotion costs Promotion of cost reduction Review of inventory levels (reduction) Expansion of the four wheeler business and electrification Focus on development investment to increase four wheeler production and reduce carbon emissions © Kawasaki Heavy Industries, Ltd. All Rights Reserved Off-road four wheeler TERYX KRX 1000 EV Project (EICMA2019) Kawasaki Powering your potential 38#393 Details by Segment - Energy Solution & Marine Engineering - FY2020 (vs. FY2019) See page 19 for the former segment "Energy System & Plant Engineering" and page 27 for "Ship & Offshore Structure" FY2021 (vs. FY2020) Orders received Net Sales Operating income Increased due to an increase in domestic municipal waste incineration plants despite a decrease in ship & offshore structure Remained at the same level due to an increase in energy business despite decreases in ship & offshore structure and plant engineering Decreased due to decreased profitability despite increased revenue Orders received (billion yen) 228.4 Net Sales (billion yen) Operating Income (billion yen) 400.0 347.2 332.0 344.7 314.6 319.5 320.0 308.6 317.1 12.7 FY17 FY18 FY19 FY20 FY21 3.8 16.9 10.3 3.5 FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 The prior results of previous segment have been reclassified to current segment © Kawasaki Heavy Industries, Ltd. All Rights Reserved Kawasaki Powering your potential 39#403 Details by Segment - Energy Solution & Marine Engineering - (Billion Yen) FY2019 Actual FY2020 FY2021 FCST in Feb. Actual Chg. Vs. FY19 Orders Received 308.6 320.0 317.1 + 8.5 Chg. Vs. FCST 2.9 Forecast Chg. Vs. FY20 400.0 + 82.9 Energy System 252.3 220.0 219.0 33.3 1.0 335.0 + 116.0 & Plant Engineering Ship & Offshore Structure 56.2 100.0 98.1 + 41.8 1.9 65.0 - 33.1 Net Sales 314.6 320.0 319.5 + 4.8 0.5 320.0 + 0.5 Energy System 242.9 240.0 240.1 2.8 + 0.1 250.0 + 9.9 & Plant Engineering Ship & Offshore Structure 71.6 80.0 79.4 + 7.7 0.6 70.0 9.4 Operating Income [Margin] 16.9 [5.3%] 9.5 10.3 - 6.5 + 0.8 3.5 6.8 [2.9%] [3.2%] [-2.1pt] [+ 0.2pt] [1.0%] [-2.1pt] The prior results of previous segment have been reclassified to current segment © Kawasaki Heavy Industries, Ltd. All Rights Reserved Kawasaki Powering your potential 40#413 Details by Segment - Energy Solution & Marine Engineering - Net Sales (billion yen) Energy System & Plant Engineering 112.0 103.8 100.1 99.3 84.2 25.6 88.2 82.5 77.7 23.6 73.2 73.0 70.5 15.9 18.6 72.2 67.9 70.5 72.8 23.3 64.8 24.9 86.4 84.1 15.8 25.3 80.6 80.2 19.7 22.0 17.6 22.1 16.0 17.5 22.8 64.9 14.2 66.7 59.3 53.5 52.3 51.0 52.9 54.4 55.3 50.5 50.0 45.0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2017 FY2018 FY2019 FY2020 Operating Income (billion yen) 10.4% 5.0% 3.7% 5.3% 8.6 4.8% 4.7% 4.3% 4.5% 3.6% 2.6% 2.1% 5.3 2.6% 5.7 4.6 1.5% 4.7 3.8 0.6% 3.1 3.1 - 1.6 1.5 1.9 2.6 1.8 0.4 1.1 - 3.3 - 2.1% 4.6% The prior results of previous segment have been reclassified to current segment © Kawasaki Heavy Industries, Ltd. All Rights Reserved Kawasaki Powering your potential 41#423 Details by Segment - Energy Solution & Marine Engineering - Market Overview See page 22 for the former segment "Energy System & Plant Engineering and page 30 for "Ship & Offshore Structure" © Kawasaki Heavy Industries, Ltd. All Rights Reserved made-in-Japan, high-efficiency gas turbine" L30A" Liquefaction and shipment site (Port of Hastings, Victoria) Specific Efforts Focus on sales activities to recover orders Aiming to steadily take in new projects that have been temporarily frozen due to the impact of the COVID-19 as well as new ones in anticipation of the aftermath Topic Overseas expansion of "L30A" gas turbines, made-in-Japan, world's highest level of efficiency In March 2021, Kawasaki received the first international order for one "L30A" gas turbine from Weifang Bintou Distributed Energy Co., Ltd. of Shandong Province, China China is a major market for the time being, where investment in distributed power generation and gas power generation is expanding Focus on receipt orders for L30A and other Combined Cycle Power Plants, utilizing the local subsidiary established at the time of the first order in China Establishing a leading position in the decarbonization field Accelerating commercialization efforts in cooperation with Hydrogen Strategy Division Establishing "Hydrogen Business Solutions Office" in conjunction with the integration of internal companies Combining hydrogen technologies, know-how, and human resources Playing a leading role in the commercialization demonstration of liquefied hydrogen supply chain development planed for the mid-2020s Kawasaki Powering your potential 42#434 Shareholder Return Dividend Policy The medium to long-term consolidated dividend payout ratio for net income attributable to owners of the parent is set at 30%, with stable dividends in mind. In addition to future business forecasts, financial conditions such as free cash flow and debt-to-equity ratio, and other factors are comprehensively taken into account. Dividend for FY2020 No year-end dividend for the FY2020 is decided in sight of the severe business conditions, in which net income attributable to owners of the parent recorded a loss of 19.3 billion yen due to the severe impact of the COVID-19 Dividend for FY2021 Dividend for FY2021 is 30 yen per share (dividend payout ratio of 29.5%) due to expectation to return to profitability with a high degree of certainty, although aerospace systems will continue to be in a difficult situation Dividend payout ratio 30% 19.3% 35.8% 43.5% 38.2% 34.6% 32.3% 120 27.0% 25.9% 100 42.5% 31.3% - 29.5% Deficit 60 dividend 50 50 30 30 70 60 60 35 30 0 FY'09 FY'10 FY'11 FY'12 FY'13 FY'14 FY'15 FY'16 FY'17 FY'18 FY'19 FY'20 FY'21 © Kawasaki Heavy Industries, Ltd. All Rights Reserved Kawasaki Powering your potential 43#444 Project Topics Progress of the hydrogen related projects January, 2021 April, 2021 Conducted berthing test at the pier of the liquefied hydrogen carrier "SUISO FRONTIER" Commenced operations of a brown coal gasification and hydrogen refining facility and a hydrogen liquefaction and loading station in Victoria, Australia Established "Hydrogen Strategy Division" Formed a consortium with Yanmar Power Technology Co., Ltd., and Japan Engine to pursue joint development of hydrogen fueled marine engines Developed cargo containment system for large liquefied hydrogen carrier with world's highest carrying capacity (40,000m³ per unit), and obtained AiP from ClassNK LH2 LH 2 Birthing test at Kobe airport island hydrogen liquefaction and loading station in Australia Image of large liquefied hydrogen carrier © Kawasaki Heavy Industries, Ltd. All Rights Reserved Kawasaki Powering your potential 44#454 Project Topics Automated PCR viral testing service • Started nation's first automated PCR viral testing service using a robot system at Fujita Health University (in Aichi prefecture) in March, 2021 Started joint research project together with Kyoto University Hospital and Sysmex Corporation, to evaluate the large-volume automated PCR viral testing robot system in social implementation in April, 2021. Evaluation items Accuracy of testing, Performance in case of mass processing Business design from inspection request to report and follow-up of results 1 Built in a movable container Advantages 2 All stages are automated to test 2,500 samples per day 3 Shorter testing times (completed within 80 minutes) applicable to Sample Pooling Approx. 2.5 m Sample container Nucleic acid extraction Reagent preparation PCR testing equipment KU:P Kawasaki Powering your poential opening and dispensing Approx. 12 m Appearance Transportable by trailer and easy to install Inside the container Automated PCR viral testing system © Kawasaki Heavy Industries, Ltd. All Rights Reserved mex 1 Kawasaki Powering your potential 45#464 ESG Topics To create Social Value through our Businesses March, 2021 The Swappable Battery Consortium for Electric Motorcycles, established by 4 major motorcycle manufactures (including Kawasaki), has reached an agreement to standardize swappable batteries and replacement systems, allowing battery sharing and paving the way for increased adoption of environmentally-friendly electric motorcycles in Japan. To Enhance Corporate Governance June, 2020 Kawasaki Transitioned to a company with audit & supervisory committee with a view to responding swiftly to rapid changes in the management environment while further strengthening its supervisory function • Delegation of authority to officers responsible for specific businesses . Review of the ratio of outside directors (6 out of 13 outside directors) • Elimination of concurrent posts as directors and officers responsible for specific businesses • Evaluation by Society Selected as "MSCI Japan Empowering Women (WIN) Select Index" for the first time, which make Kawasaki constituent of all of the four ESG indices adopted by GPIF Selected as "FTSE4Good Index Series" for fourth consecutive year 2020 CONSTITUENT MSCI ESGセレクト・リーダーズ指数 Selected as "Dow Jones Sustainability Asia Pacific Index" for eighth consecutive year FTSE4Good © Kawasaki Heavy Industries, Ltd. All Rights Reserved Member of Dow Jones Sustainability Indices Powered by the S&P Global CSA Kawasaki Powering your potential 46#474 Appendix - CAPEX, Depreciation and Amortization - - (Billion Yen, Persons) FY2019 FY2020 FY2021 Actual Actual Chg. Vs. FY19 Actual Chg. Vs. FY20 CAPEX 70.4 55.6 14.8 56.0 + 0.4 Depreciation and 61.2 61.2 0.0 63.5 + 2.3 amortization R&D expenses 52.6 44.9 - 7.6 49.5 + 4.6 Number of Employees 36,332 36,691 + 359 37,300 + 609 Domestic 26,616 26,901 + 285 27,400 + 499 Overseas 9,716 9,790 + 74 9,900 + 110 Net Sales 63.5 Depreciation and Amortization ratio to net sales 4.1% 4.2% 3.7% 3.7% 3.5% 3.3% 3.1% 2.9% CAPEX 82.7 80.0 76.3 Depreciation and Amortization 82.1 70.4 66.9 55.6 61.2 61.2 59.0 56.1 51.5 49.0 44.5 56.0 1,486.1 1,541.0 1,518.8 1,574.2 1,594.7 1,641.3 1,488.4 1,500.0 FY'14 FY'15 FY'16 FY'17 FY'18 FY'19 FY'20 FY'21 (FCST) FY'14 FY'15 FY'16 FY'17 FY'18 FY'19 FY'20 FY'21 (FCST) © Kawasaki Heavy Industries, Ltd. All Rights Reserved Kawasaki Powering your potential 47#484 Appendix - Others - Order Backlog FY2019 (billion yen) FY2020 Net Sales in Foreign Currencies by Segment (USD) (billion USD) FY2019 FY2020 FY2021 Actual Actual Change Actual Actual Forecast Aerospace Systems 576.0 527.8 48.1 Aerospace Systems 1.01 0.68 0.83 Energy System & 390.8 369.7 21.0 Plant Engineering Rolling Stock 0.12 0.08 0.03 Precision Machinery & Robot 50.6 69.2 + 18.5 Energy Solution & 0.17 Marine Engineering Ship & Offshore Structure Rolling Stock 85.9 104.6 + 18.6 Energy System & 0.12 0.03 Plant Engineering 499.4 443.2 56.2 Ship & Offshore Structure 0.19 0.24 Motorcycle & Engine Precision Machinery & Robot 0.16 0.17 0.15 Others 24.5 Total 1,627.4 26.6 + 1,541.4 2.1 Motorcycle & Engine 0.40 0.42 0.43 86.0 Total 2.00 1.61 1.61 * Impact on profit by FX fluctuation of 1 yen Net sales by region Weighted-average (billion yen) exchange rates Net Sales in Foreign Currencies(EUR) FY2019 FY2020 実績 実績 前期比 (EUR/JPY) (billion EUR) Japan 699.8 704.1 + 4.2 FY2019 actual 121.70 FY2019 actual 0.44 USA 413.0 Europe 220.5 143.4 A Asia 236.6 Other 71.0 Total 1,641.3 313.6 A 99.4 77.1 277.2 + 40.5 50.0 A 21.0 1,488.4 ▲ 152.8 FY2020 actual 124.61 FY2020 actual 0.32 FY2021 forecast 128.00 FY2021 forecast 0.35 Impact on profit by FX fluctuation of 1 yen * classified by country or region based on the customer's location. © Kawasaki Heavy Industries, Ltd. All Rights Reserved Kawasaki Powering your potential 48#49世界の人々の豊かな生活と地球環境の未来に貢献する "Global Kawasaki" RKK Kawasaki Powering your potential