Mitsui E&S : Business Overview（4pages,356KB）/span>

Strategy Group

Business Overview

Ship

Main products	Relevant Group Companies
Merchant Ships /	Mitsui E&S Shipbuilding Co., Ltd.	Niigata Shipbuilding & Repair, Inc.
Naval and Governmental Ships /	Akishima Laboratories (Mitsui Zosen) Inc.	MES SHIPPING CO.,LTD.
Engineering /	MES YURA DOCK CO., LTD.	TGE Marine Gas Engineering GmbH
Ocean Development /	Shikoku Dockyard Co., LTD
Underwater Equipment / Ship Repair

Although orders were received for training vessels and bulk cargo carriers, consolidated orders decreased by ¥11.2 billion year on year to ¥57.5 billion. Net sales decreased by ¥22.7 billion year on year to ¥92.4 billion, due to a decrease in shipbuilding work and other factors. Operating losses stood at ¥2.0 billion, an improvement of ¥800 million from the previous fiscal year, mainly due to a decrease in unprofitable construction work.

Net Sales Composition

New Order (¥billion)

Major Initiatives in FY2020

Completed and delivered all ships built at Chiba Works

Made progress in the collaborative development of the shipbuilding business, signed a transfer agreement for the naval ship business and a transfer agreement for subsidiary shares (Mitsui E&S Shipbuilding Co., Ltd.) for a capital alliance in the merchant ship business

Developed sales activities such as licensing designs and commissioned development and design of environmentally friendly vessels

13.9%

Net Sales (¥billion)

96.9	115.1	92.4
			40.0
2019/3	2020/3	2021/3	2022/3
			(Forecast)

113.2
	68.7	57.5
			30.0
2019/3	2020/3	2021/3	2022/3
			(Forecast)

Operating Income (¥billion)

	△2.9	△2.0	△3.0
△8.1
2019/3	2020/3	2021/3	2022/3
			(Forecast)

P I C K	Naming and launching ceremony for
U P	the destroyer "Kumano"

On November 19, 2020, a naming and launching ceremony was held at Mitsui E&S Shipbuilding's Tamano Works for a 3,900t destroyer ordered by Mitsubishi Heavy Industries, Ltd. for Japan's Ministry of Defense. The vessel was christened Kumano. This vessel is one of a pair of destroyers planned to be built in FY2018, with the concept of improving the ability to respond to various missions and to make the vessels

more compact. As a new initiative, we adopted a scheme of simultaneous construction, with the main contractor Mitsubishi Heavy Industries, Ltd. building the first vessel Mogami at its Nagasaki shipyard and Mitsui E&S Shipbuilding Co., Ltd. building the second vessel Kumano at Tamano Works. The vessel is currently undergoing quayside outfitting work and is scheduled to be delivered in March 2022.

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Strategy Group

Business Overview

Machinery

Main products	Relevant Group Companies
Marine Propulsion System /	Mitsui E&S Machinery Co., Ltd.	SANZO MANUFACTURING & CONSTRUCTION CO. LTD.
Crane & Systems /	K AJl TECHNOLOGY CORPORATION	Mitsui E&S Technical Research Co., Ltd.
Industrial Machinery / Robotics /	Mitsui E&S Power Systems Co., Ltd.	AZUMA MACHINERY CO.,LTD.
Radar Search /	MITSUI MEEHANITE METAL CO.,LTD.	PACECO CORP
Research & Experimental Equipment &
Special Construction / After-sales Services

Consolidated orders decreased by ¥49.0 billion year on year to ¥125.3 billion due to a decrease in demand for marine diesel engines accompanying a slump in the market for construction of new ships, and a decrease in demand for container cranes and industrial machinery, etc., due to postponement of investment due to the spread of the COVID -19 pandemic. Net sales decreased by ¥13.2 billion year on year to ¥159.0 billion as a result of the postponement of delivery of marine diesel engines due to production adjustments at shipyards. Operating income decreased by ¥2.1 billion year on year to ¥9.8 billion, mainly owing to the decrease in sales.

Net Sales Composition

New Order (¥billion)

Major Initiatives in FY2020

Developed sales activities positioning gas-fueled main engines for ships as a growth area

Produced 148 large marine diesel engines (3.31 million horsepower)

Strong demand for Near Zero Emission (NZE) Transtainers® supporting zero emissions in the future

After-sales service business performed strongly in parts servicing and retrofit business in response to environmental regulations

24.0%

Net Sales (¥billion)

158.2	172.3	159.0	160.0
2019/3	2020/3	2021/3	2022/3
			(Forecast)

153.1	174.4	125.3	180.0
2019/3	2020/3	2021/3	2022/3
			(Forecast)

Operating Income (¥billion)

	11.9	9.8
8.5		9.0
2019/3	2020/3	2021/3	2022/3
			(Forecast)

P I C K	Participating the Japan Hydrogen Association (JH2A)
U P	and development of Transtainer® cranes equipped
	with pure hydrogen fuel cell (FC)

Mitsui E&S Machinery Co., Ltd. (MES-M) and Kaji Technology Corporation has joined the Japan Hydrogen Association, a new organization that promotes global collaboration in the hydrogen field and the formation of hydrogen supply chain, and will contribute to realize the hydrogen society. As one of specific initiative, MES-M is planning to complete the in-house testing of the Transtainer® crane equipped with FC by the end of FY2022. We will also provide hydrogen gas compressors for hydrogen fueling stations, hydrogen delivery facilities etc.

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Strategy Group

Business Overview

Ocean Development

Main products	Relevant Group Companies
Solutions for Offshore Oil and	MODEC, Inc.
Gas Production Projects

Despite orders received for FPSO construction projects, etc., consolidated orders decreased by ¥315.3 billion year on year to ¥320.8 billion. Sales decreased by ¥22.9 billion year on year to ¥309.9 billion, despite progress in FPSO construction projects. Operating losses stood at ¥21.8 billion, a decrease of ¥16.9 billion year on year, due in part to the impact of the COVID-19 pandemic.

Major Initiatives in FY2020

Received an O&M (Operation and Maintenance) contract for FPSO for Senegal

Profitability was worsened by delays in ongoing FPSO construction projects due to the COVID -19 pandemic

Commenced research on low-cost technology development in floating offshore wind power generation

Net Sales Composition

46.7%

Net Sales (¥billion)

	332.9	309.9	400.0
222.5
2019/3	2020/3	2021/3	2022/3
			(Forecast)

New Order (¥billion)

	636.1
		320.8	200.0~
254.2		400.0
2019/3	2020/3	2021/3	2022/3
			(Forecast)

Operating Income (¥billion)

14.9
			0
	△4.9
		△21.8
2019/3	2020/3	2021/3	2022/3
			(Forecast)

P I C K	An FPSO O&M (Operation and Maintenance) contract was
U P	received for the Sangomar Field off the coast of Senegal

Group company MODEC, Inc. received an order in January 2020 from Woodside Energy, a major Australian energy company, for an FPSO for the noteworthy first offshore oil development project off the coast of Senegal, West Africa, and is proceeding with its construction. In December 2020, MODEC, Inc. received an O&M (operation and maintenance inspection) contract for this FPSO. The

company received the order for a long-term contract for 10 years after the delivery of the FPSO to the customer (with 10 extension options every year thereafter). The project is expected not only to optimize the company's business portfolio from a geographical perspective, but also contribute to the expansion of its stable earnings base in the long-term.

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Strategy Group

Business Overview

Engineering

Main products	Relevant Group Companies
Overseas EPC Contractor for	Mitsui E&S Engineering Co., Ltd.
Civil/Architectural Works

Consolidated orders decreased by ¥25.5 billion year on year to ¥22.7 billion, mainly due to the impact of the transfer of subsidiaries in the chemical plant business in the previous fiscal year. Net sales decreased by ¥31.2 billion year on year to ¥38.4 billion due to a decrease in consolidated subsidiaries, in addition to the impact of a decline in new orders. Operating income improved by ¥71.7 billion to ¥300 million due to the posting of a large provision for losses on construction contracts in the previous fiscal year.

Major Initiatives in FY2020

Civil engineering and construction of thermal power plants in Indonesia progressed within the expected range

Completed and delivered civil engineering and construction work for thermal power plants in Vietnam

Transferred biomass power generation business subsidiary (Green Power Ichihara Co., Ltd.) Concluded a transfer agreement for an environmental business subsidiary (Mitsui E&S Environmental Engineering Co., Ltd.)

Net Sales Composition

5.8%

Net Sales (¥billion)

69.0	69.6
		38.4
			20.0
2019/3	2020/3	2021/3	2022/3
			(Forecast)

New Order (¥billion)

58.9	48.2
		22.7
			0
2019/3	2020/3	2021/3	2022/3
			(Forecast)

Operating Income (¥billion)

		0.3
			△2.0
△79.7	△71.4
2019/3	2020/3	2021/3	2022/3
			(Forecast)

P I C K	Commenced commercial operation of biomass power plant
U P	in Ichihara, Chiba Prefecture

On December 17, 2020, Ichihara Biomass Power Co., Ltd.-a joint venture between ITOCHU Corporation, Osaka Gas Co., Ltd. and Mitsui E&S Engineering Co., Ltd.- commenced commercial operations. The power plant is located at the Mitsui E&S Holdings Chiba Works in Ichihara, Chiba Prefecture, where Mitsui E&S Engineering Co., Ltd. has been proceeding with the construction. The biomass plant

(power generation capacity 49.9 MW) uses wood pellets and palm kernel shells (PKS) for the entire volume of its fuel, and can cover around 350 million kW of annual power consumption, the equivalent of around 120,000 households. Going forward we will continue to operate stable power plants that take advantage of the strengths of the investing companies, such as by placing group companies in charge of operation and maintenance.

Others				(¥billion)	(¥billion)	(¥billion)
			Net Sales Composition	New Order	Net Sales	Operating Income
Main products		Relevant Group Companies	9.6%	50.3	64.0	1.5
Real Estate Businesses /		Mitsui E&S Business Service Co., Ltd. / Mitsui E&S Systems Research Inc. /
IT Solution / Service		MES Facilities Co., Ltd.

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