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CEO MESSAGE

CEO MESSAGE

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In the more than 130 years since our company was founded, we at MHI have strived to create a positive impact on society by addressing our customers' diverse range of business needs. This idea is embodied in the first of our Company Principles: "Deliver reliable and innovative solutions that make a lasting difference to customers and communities worldwide."

The world as we know it is changing-from the rise of the Fourth Industrial Revolution to the evolving nature of globalism. We must consider these global megatrends together with the needs of our customers around the world as we develop revolutionary new business strategies and continue to strengthen management structures that enables flexible and persistent growth.

Prior to the launch of our 2018 Medium-Term Business Plan in May 2018, MHI Group focused primarily on expanding the scale of our operations and improving profitability. We completed our structural reform agenda by shifting from headquarters-based management to a system of three core industrial domains, further developing strategic business units, implementing a financial strategy which emphasizes cash flow, and enacting reforms to our corporate governance. MHI Group is now in a position of great strength, as demonstrated by our sound financial base.

To achieve sustainable growth, we are focused on two primary components of our 2018 Medium-Term Business Plan. First, we will work toward achieving a balance between net sales, total assets and market value by following the "Triple-One Proportion" (TOP) concept-which aims to achieve a 1:1:1 ratio of these three key factors. Second, we will focus on near-term solutions in the 2018 Medium-Term Business Plan while simultaneously developing a long-term strategic process through MHI Future Stream. MHI Future Stream takes us back to the roots of our call to action-"Move the World Forward"-by leveraging global megatrends and innovative new technology to transform society for the better.

We are committed to building a society where all people can live with peace of mind. With forward-thinking spirits, MHI Group will blaze a path of innovation to realize our vision-

MOVE THE WORLD FORWARD

Shunichi MiyanagaShunichi Miyanaga
President and CEO

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