Slides
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CONFIDENTIAL © Kawasaki Heavy Industries, Ltd. All rights reserved October 6, 2026 Kawasaki Heavy Industries, Ltd. Yasuhiko Hashimoto Representative Director President and CEO Group Vision 2030 Progress Report Meeting
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CONFIDENTIAL © Kawasaki Heavy Industries, Ltd. All rights reserved2 Company-wide Investment Priorities ② Defense ③ Energy ④ Physical AI ①
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CONFIDENTIAL © Kawasaki Heavy Industries, Ltd. All rights reserved3 Company-wide Investment Priorities ② Defense ③ Energy ④ Physical AI A Safe and Secure Remotely-Connected Society Advanced Smart Mobility Energy & Environmental Solutions ①
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© Kawasaki Heavy Industries, Ltd. All rights reserved Revenue [¥ bn] 3,000 2,000 1,000 Business profit Margin [%] 15 10 ５ Three Years of Record Growth ◼ Record revenue and business profit in both FY2024 and FY2025, with new records expected in FY2026 Revenue: ¥2.56 trillion Business profit: ¥180 billion 10%+ Revenue Business profit margin Business profit margin 8% ※ 【FY2026 Forecast】 ０ ０ 2020 20302021 2022 2023 20252024 2026 2027 Business profit margin *: Business profit margin excluding one-time losses related to PW1100G-JM engine * 4
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© Kawasaki Heavy Industries, Ltd. All rights reserved Changes in the Business Environment 5 Aerospace Systems Energy Solution & Marine Engineering Precision Machinery & Robot Rolling Stock Powersports & Engine ◼ Six years after establishing three focus fields under Group Vision 2030, our business environment has grown more complex Energy price increases Rising electricity demand from AI/data center expansion The rise of AI Economic policy (tariffs & resources) Growing importance of security and defense Tensions in the Middle East Extreme weather events global shift back to natural gas A Safe and Secure Remotely- Connected Society Advanced Smart Mobility Energy & Environmental Solutions
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© Kawasaki Heavy Industries, Ltd. All rights reserved Well positioned in Japan's 17 strategic fields 6 Japan’s 17 strategic fields 8 /17fields AI and semiconductors Defense industry National resilience Energy Aviation and space Shipbuilding Advanced medicine Food tech Quantum technologies Marine and ocean Synthetic biology and biotechnology Port logistics Fusion energy Digital technologies and cybersecurity Information and telecommunications Materials Content industry ◼ We cover 8 of Japan's 17 strategic fields, set in light of recent social conditions ◼ Aligning with national policy to drive further growth
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© Kawasaki Heavy Industries, Ltd. All rights reserved Raising capital to fund growth while keeping finances sound 7 To further accelerate growth, riding the tailwind of changing social conditions and issues, we raised about ¥200 billion in July 2026 (public offering: about ¥100 billion; CBs*: about ¥100 billion) ✓ Strengthen core businesses and invest in mid-to-long term growth areas ✓ Expand investment capacity while keeping net D/E ratio around 50% * Convertible bonds Debt only Existing capacity Equity 200 200＊ *Assumes equal new borrowing After the raise Before the raise Ready to act on new opportunities For this round of growth investment Investments Investment capacity Aerospace and aero engines Gas turbines Shipbuilding Semiconductor robots Hydrogen supply chain Physical AI Core business Growth areas About ¥100 bn About ¥100 bn Short term: efficiency gains Existing capacity
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© Kawasaki Heavy Industries, Ltd. All rights reserved Growth of businesses funded by the capital raise 8 2026 (Forecast) 2030 Future･･･ Revenue [¥bn] Funded projects Funded projects Funded projects 2,000 1,000 3,000 Semiconductor robots Gas turbines Ships Commercial aircraft and aero engines Physical AI (contributing to internal production efficiency) Hydrogen Semiconductor robots Gas turbines Ships Commercial aircraft and aero engines Physical AI Hydrogen ◼ Returns should start to show around 2028 ◼ Short term: higher robot and gas turbine output lifting sales, and physical AI raising productivity across our manufacturing processes Long term: hydrogen and physical AI should deliver the largest returns [FY]
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© Kawasaki Heavy Industries, Ltd. All rights reserved Cash allocation (FY2027-FY2030) 9 Raise 200 Op. CF* 1,100 Cash in Cash out Aerospace & aero engines Robots + Physical AI Hydrogen Growth 550 Share- holder returns 200 *Subsidies for defense, shipbuilding, etc. are excluded from Cash out About ¥550 billion funded by the capital raise Investment for Semiconductor robots & Physical AI Commercial aircraft & aero engines Hydrogen supply chain Ships & gas turbines Gas turbines, engines, ships Hydrogen Semiconductor robots & Physical AI Gas turbines & engines Defense Aerospace & engines, etc. FY2027 to FY2030: investing in core businesses that are highly profitable today with strong growth ahead, and in new growth businesses with major long-term growth potential, funded by our capital raise Upkeep 550 Other About ¥1.3 tn About ¥1.3 tn Includes R&D *Before R&D expenses
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© Kawasaki Heavy Industries, Ltd. All rights reserved Business Plan Update Toward 2030 10 Investing early and decisively, backed by our capital raise FY2030: revenue ¥3.3 tn+, business profit ¥330 bn+ (margin 10%+) Revenue [¥ bn] 3,000 2,000 1,000 Business Profit Margin [%] 15 10 ５ Revenue Business profit margin Business profit margin ０ ０ 2020 20302021 2022 2023 20252024 2026 2027 Business profit margin 8% ＊ 10%+ *: Business profit margin excluding one-time losses related to PW1100G-JM engine
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© Kawasaki Heavy Industries, Ltd. All rights reserved Defense business Defense business 0 1,000 2,000 3,000 Revenue by segment 11 By FY2030, Aerospace Systems, Energy Solution & Marine, and Precision Machinery & Robot will account for a larger share of revenue Aerospace Systems FY2026 Revenue (Forecast) FY2030 Revenue (Illustrative) Revenue [¥bn] Energy Solution & Marine Aerospace Systems Precision Machinery & Robot Powersports & Engine Rolling Stock Energy Solution & Marine Precision Machinery & Robot Rolling Stock Powersports & Engine Other Other
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© Kawasaki Heavy Industries, Ltd. All rights reserved Faster Solutions for a Faster-changing Society 12 Aerospace Systems Energy Solution & Marine Engineering Precision Machinery & Robot Rolling Stock Powersports & Engine A Safe and Secure Remotely- Connected Society Near-Future Mobility Energy & Environmental Solutions Defense Healthcare Power generation Energy transport Hydrogen supply chainCORLEO Physical AI
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CONFIDENTIAL © Kawasaki Heavy Industries, Ltd. All rights reserved13 A Safe and Secure Remotely-Connected Society Advanced Smart Mobility Energy & Environmental Solutions Company-wide Investment Priorities ② Defense ③ Energy ④ Physical AI ①
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© Kawasaki Heavy Industries, Ltd. All rights reserved Mid-2030s ¥1 trillion+ Defense Business: Progress and Further Growth 2023 2024 2025 20302026 20272022 Revenue / Business Profit Margin Approx. ¥240 bn Approx. ¥430 bn <5% ≥5% 6% 7% ◼ Driven by Japan’s increased defense spending, FY2030 revenue forecast revised upward to approx. ¥700–800 billion ◼ Aiming for revenue of over ¥1 trillion in the mid-2030s through initiatives responding to “new ways of warfare” ◼ Defense business profit margin expected to exceed 10% from FY2027 onward, owing to contract system revisions of MOD*, etc. 14 Profit margin (previous forecast) FY2030: Approx. ¥700–800 billion Previous forecast: ¥500–700 billion Mid-2030s target: ¥1 trillion FY2027 onward: Business profit margin over 10% (FY) Approx. ¥510 bn (forecast) *MOD: Ministry of Defense
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© Kawasaki Heavy Industries, Ltd. All rights reserved Source: Edited from a video of the ATLA Defense Technology Symposium 2025 Advanced airframe design Moving toward production & upgrades FY2025: Research prototype contracts awarded June 2026: First aircraft delivered 2025: Successful launch test Moving toward next-generation SSM Achievements of Existing Programs Source: Japan Ministry of Defense (X) Precision guidance KJ engine SOJ (Stand-off electronic warfare aircraft) New SSM (New anti-ship missile for the defense of remote islands) Stand-off Defense Capabilities 15 Building up technical data
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© Kawasaki Heavy Industries, Ltd. All rights reserved ■ Strengthening response to “new ways of warfare”: focus on unmanned defense capabilities, AI, etc. Approx. ¥43.5 trillion Current DBP* FY2023-2027 Next DBP FY2027-2031 DBP after next FY2032-2036 Changes in the security environment Expanding military activities by neighboring countries in the Pacific Deepening military ties among countries in the region Rapid proliferation of AI and unmanned aircraft Changes in allies’ security policies 9.2 4.9 2.9 10.5 3.5 20.1 14.0 4.9 14.1 4.9 MOD budget categories Unmanned Defense Capabilities Stand-off Defense Capabilities Integrated Air and Missile Defense Capabilities Command and Control / Intelligence-related Functions Cross-Domain Operation Capabilities Mobile Deployment Capabilities / Civil Protection Sustainability and Resiliency Reinforcement of Defense Production Base Research and Development Base-related measures Education and training, fuel, etc. Seven key fields 16 ① Adapting to “new ways of warfare” AI / unmanned assets / stand-off / integrated air and missile defense / space / cyber ② Sustained response capabilities ③ Foundation of defense capabilities ■ New three pillars and nine priority items Defense of the Pacific and sea lanes Defense production and technology base / Human resource base Japan’s Defense Budget Outlook *DBP: Defense Buildup Program
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© Kawasaki Heavy Industries, Ltd. All rights reserved Systems and equipment to realize “new ways of warfare”Key initiatives 17 Our Initiatives for “New Ways of Warfare” Current technologies and expertise New SSM ② Autonomous collaborative systems SOJ ① Manned-unmanned teaming T-4 ③ Integrated education & training [Investment in foundations] P-1 KJ14 Submarines KJ100 Advancing AI technologies Collaboration with startups Partnerships with overseas companies In-house development of KJ engines Research on edge AI computing devices Development of next trainer aircraft and integrated training system Development of collaborative UAVs Training system development Higher intelligence via edge AI UUVs Decision-making and image processing AI ・ DE R&D Certification Production Capacity Security Digital EngineeringArtificial Intelligence ④ KJ engines
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© Kawasaki Heavy Industries, Ltd. All rights reserved “New Ways of Warfare” ①: Manned-Unmanned Teaming ◼ Initiatives for unmanned aircraft that complement or substitute for manned aircraft missions Multi - purpose collaborative UAV Attritable UAV Jamming, deception and strike in high-threat areas Taking over electronic warfare in threat areas Medium/large UAVs Manned aircraft Anti-ship warfare support in threat areas Tracking and strike in high-threat areas Continuous anti-submarine warfare support over wide areas 18This image was created using generative AI.
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© Kawasaki Heavy Industries, Ltd. All rights reserved “New Ways of Warfare” ②: Autonomous Collaborative Systems ◼ In remote, high-threat areas, “edge AI*” units cooperate to accomplish assigned missions Jammer munition – electronic jamming Next - generation SSM – strike 19This image was created using generative AI. Decoy munition – diversion Next - generation SSM – strike UUV (unmanned underwater vehicle) Decoy munition – diversion *edge AI :Technology that performs information processing on a device’s own computing hardware without relying on the cloud or remote servers.
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© Kawasaki Heavy Industries, Ltd. All rights reserved 20 ◼ Effective AI-enabled education and training system “New Ways of Warfare” ③: Integrated Education ＆ Training AI instructor Virtual UAV Virtual collaborative UAV ◼ Actual flight training ◼ Virtual environment functions ◼ AI support AI instructor Virtual UAV Virtual collaborative UAV Virtual manned aircraft ◼ Simulator training ◼ Simulated combat training ◼ AI support Advanced ground training device Next-generation trainer aircraft Integrated Education & Training Data Platform ◼ Integrated training data management ◼ Common training environment platform ◼ AI support Instructor support Course material manage ment Training plan management Individual student management Training content delivery Equipment operation support Flight operations support Communication
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© Kawasaki Heavy Industries, Ltd. All rights reserved21 ◼ Promoting in-house development and lineup expansion of the KJ engine series for unmanned assets ◼ Japan’s only small turbofan engine that can supply high electrical power 2020 2030 2040 KJ14 KJ10 Technology level KJ100 Expanding sales channels to overseas markets For low - cost missiles Contributing to stronger defense capabilities Under MOD development contract 2026– Under MOD development contract 2020– Under MOD development contract 2024– For UAVs For missiles KJ310 KJ300 “New Ways of Warfare” ④: KJ Engines