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MHI to Designate Full Roster of SBU Leaders In Tandem with Shift to 4-Domain Business Structure Target Set on Dynamic Response to Market and Customer Movements Through Consolidation and Strengthening of Authority And Clarification of Responsibilities

No.1705
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Tokyo, August 7, 2013 - As announced earlier, starting October 1 Mitsubishi Heavy Industries, Ltd. (MHI) will consolidate and reorganize its current nine business segments into four business domains: "Energy & Environment," "Commercial Aviation & Transportation Systems," "Integrated Defense & Space Systems" and "Machinery, Equipment & Systems." In tandem with this shift, the company has decided to clarify who are to serve as the heads of the various strategic business units (SBU) under the domains.

In line with the portfolio management scheme introduced in the company's 2012 Medium-Term Business Plan, which is based on a system of strategic business evaluations, the SBUs have been categorized into various business positions in accordance with their business life stage (nascent, prime, maturity) and profitability/financial soundness. Based on these classifications, the appropriate return requirement has been set and investment capital is being allocated accordingly, in a quest to make optimal use of companywide resources and enhance corporate value.

Each SBU is being called on to maximize its strategic added value (SAV) while making maximum use of its invested capital allocation. To achieve this, the company believes that swift judgment and dynamic organizational operation by leaders overseeing each business are necessary, in order to respond appropriately and in a timely manner to market and customer movements and to raise profitability. It is based on this thinking that the decision was made to clarify who is to serve as the head of each SBU.

As a result of the shift to a domain structure coupled with the appointment of SBU heads, authority in conducting each business area will be consolidated and strengthened and responsibilities will be clarified (i.e. vertically integrated functions will be strengthened) as MHI seeks to achieve optimal business operations companywide and within each domain. In addition, the company will also pursue enhancement of its corporate division's companywide strategy functions and business support functions (i.e. strengthening of horizontally integrated functions) as it seeks to enhance its growth potential and profitability as a global enterprise and achieve its goal of becoming a highly profitable company with a business scale of 5 trillion yen.