At this point, we'd like to start the meeting. Thank you very much for being here out of your busy schedules today. We'd like to start MHI meeting for fiscal year 2017 results and explanation of 2018 Medium-Term Business Plan. My name is Nakamura. I'll be serving as a moderator today. First, allow me to introduce today's speakers. To your left is Miyanaga, the President and CEO. To your right is Koguchi, Executive Vice President and CFO. Allow me to explain to you the flow of today's meeting. First, our CFO, Koguchi, will explain 2017 financial results. Our President, Miyanaga, will explain the three-year Medium-Term Business Plan that starts this year. We have question and answer session. We'd like to close at 5:00 P.M. We ask for your cooperation. We'd like to invite Koguchi for the explanation for the financial result for 2017. Good afternoon, ladies and gentlemen.
My name is Koguchi. I'm responsible for financial affairs at MHI. Thank you very much for being here out of your very occupied schedules to participate in this meeting. Please refer to the materials that you have at hand, which is entitled Financial Results for Fiscal Year 2017. We have summary of financial results for fiscal year 2017. Orders received, JPY 3,875.7 billion. Compared with the previous year, there is a decrease of about JPY 400 billion, which is due to the Power Systems and also the Aircraft, Defense & Space. There have been a decrease. These are the reasons for this decrease. During the term, there have been a JPY 4 trillion revision. There have been the revision in the middle of the business. There has been a decrease of about JPY 100 billion.
Net sales was JPY 4,110 billion, which is JPY 196 billion increase, which is a slight increase compared with the revised plan. About the operating income, JPY 126.5 billion, which is the decrease of JPY 24 billion compared with the previous year. Compared with the revised version, it is the decrease of JPY 50 billion. The net income was JPY 70.4 billion, which is the decrease of JPY 17 billion. Again, compared with the revised version, it is a decrease of JPY 10 billion. ROE was 3.9%. EBITDA was JPY 319 billion. This shows the segment information. In terms of orders received, as I explained, in the area of Power Systems and Aircraft, Defense & Space, there have been a decrease. However, in the case of Industry & Infrastructure, there have been a very steady increase in orders.
About net sales for all the domains, there were increases, and especially noteworthy was the sharp rise in the net sales increase in Industry & Infrastructure, which was the reflection of a very massive increase in orders received. About the operating income for Power Systems, the figure was JPY 108.9 billion, which is about the same as the previous terms. Compared with the revision and the revised version, it is increase of JPY 10 billion. In the case of Industry & Infrastructure, compared with the previous year, there is a decrease of about JPY 9 billion. There has been a sharp decrease compared with the revised plan, and I'll explain to you later about the details. About the Aircraft, Defense & Space, the figure is the negative JPY 15.1 billion, which is a decrease of JPY 16 billion.
This is related to MRJ development. With the acceleration of development, there has been a decrease here. As a result, the operating income was the figure that I explained earlier. Next is the balance sheet overview. Please move on to the next page. We have been working on the enhancement of the efficiency of balance sheet, this has been considered to be one of the most important pillars in order to have the enhancement of soundness. Total assets was JPY 5,487.6 billion, which is generally on par with the previous year. There have been the South African project . If you eliminate these special issues such as South African projects and MRJ, as we will explain to you with a graph, we were able to say that there has been the compression.
Especially important is the inventory, which you see the decrease, and also including the appreciation, there has been the decrease of JPY 100 billion. However, as I said, we had to increase about JPY 100 billion for the indemnification asset for South Africa. For the advanced payment received, we were able to see some results of the major activities we had. Especially important is the production, the cost or the running cost. We are now taking a look at the good balance between some factors. The total amount of the advanced payment is about JPY 1 trillion. It is much higher than the inventories. In that respect, we can safely say that the efficiency has been improved here. I'd like to explain this later on about the cash flow. In terms of cash flow, there has been a major improvement.
The interest-bearing debt is the JPY 813 billion, which is a sharp decrease by about JPY 100 billion. Also, the D/E ratio is decreasing. Next is the other cash flows. We see a cash flow improvement. We are able to say that many financial measures have been increased or improved as compared with the previous year. In the equity ratio of 33.3%, interest-bearing debt the JPY 813 billion, and D/E ratio 38%. The cash flows in terms of operating activities, there we see a decompression of balance sheet. It is JPY 345.1 billion, which is a major improvement as compared with the previous year. Next is the information by segments. This chart shows the orders received. Orange part, this is Power Systems, the turbine and conventional, the cycles has been in good shape.
For the industries, there has been some increase in the metals machinery, and turbochargers. For the mass manufacturing equipment, there has been an increase. However, on the other hand, if you take a look at the Aircraft, Defense & Space, there was a major order received last year. This year, it has gone back to normal, so it is like this. The orders backlog, JPY 16.9 billion, which is a sharp decline. Excuse me. The JPY 6 trillion 111 billion, which is a sharp decline compared with the previous year. Please note that many of them are very much related to the orders for MRJ. It is better to eliminate the MRJ impact in order to understand the actual status. That's the major difference here.
Compared with the orders received, as was mentioned, we are now receiving more orders. Maybe because of that, we now have the decrease for JPY 200 billion. Apple to apple, there has been a decrease like this. This is net sales, Industry & Infrastructure. It is very good. This is a major trend that we are able to report to you. Next is the item, the operating income by segment. The power was about the same. Industry & Infrastructure, there has been a slight decrease. I'll explain to you later on about the details. Compared with the future risk, there have been some items to be streamlined for the closing. We had to see the decrease here. In the area of Aircraft, Defense & Space, this also has decreased.
This is mainly because of the peak expenditure for development for MRJ. Next page. We see net sales by geographic areas and segment. We'd like you to take a look at it, I'd like to omit the explanation. Page 13.
Let's take a look at page 13. This is the last year's analysis of cash flow trend, and I would like to take you through this. We are trying to improve the balance sheet situation that is necessary for our future business. As a result, excluding the special factors such as no return cash out, such as cruise ship, MRJ, South African business. If we exclude those factors, the cash flow is about JPY 200 billion-JPY 250 billion in the past. This time, as I mentioned earlier, the balance sheet has been improving, and we made a further improvement on this. There was a significant improving in cash flow. On the other hand, for the special factors, for the cruise ship factor is already over. For the South Africa in the year which has just ended, we have completed most of it.
In that sense, the extraordinary factors impact is being reduced at the same time. Even with in total, we have JPY 207.9 billion, even including the special factors in cash flow. In terms of the asset management, we have been working on this on a steady basis. Excluding this, the investment is being kept at a certain level. Including this, during the 2015 Medium-Term Business Plan, we have gained some cash flow. For your reference, this shows how we spent it, JPY 820 billion in three years. Out of that, JPY 520 billion was for the new business investment as well as the risk management. For the balance sheet improvement, we have spent JPY 160 billion, and JPY 140 billion is for shareholder return. Next. I'd like to show you the comparison with the guidance numbers and mentioning some of the specific factors, as I mentioned earlier.
In terms of the operating income and cash flow, you can see both numbers at the same time on this page. For the operating income, JPY 180 billion was the forecast, and the actual number was JPY 126.5 billion. There was a downward revision of JPY 55 billion. By domain, the Power Systems was up about JPY 1 billion, JPY 10 billion. In the Industry & Infrastructure, there was a negative JPY 40 billion. This is because in the engineering division, for the future construction work, when we looked at the progress, there were some risks regarding the progress of the construction work. We have decided to take this into consideration within the fiscal year. That's why we have put aside some of the provision. This is JPY 25 billion.
For the medium-large manufactured machinery, wherever there was a risk, we decided to put aside a provision that is accounting to JPY 15 billion. For this, on the cash flow, for the future or past items, we have done some of the accounting. For this year's cash flow, there was no impact. For the Aircraft, Defense & Space, there was a deterioration of JPY 25 billion. JPY 20 billion is because of the peak period of the MRJ development activities, because we are conducting a lot of testing, including flight test. Because of that, there was JPY 20 billion outlay. For the accounting reason, for the risk factors or the reappraisal of the assets on the balance sheet, we have done some of the write-down of JPY 5 billion. There was no impact on the FCF.
OP is down JPY 55 billion. On the cash flow, there was not so much impact. Therefore, because of the increase in the improvement of the balance sheet, we were able to record a higher cash flow despite the lower operating income. Next page, please. I'd like to talk about net sales and operating income by business portfolios on the next page. In our company, we have been conducting a strategic review of the businesses. For each SBU, we have been doing the reappraisal. For the high-rated growth potential businesses, JPY 2.7 trillion is the sales amount, and OP was JPY 210 billion. This is 8% of the total. On the other hand, for the lower-rated businesses, such as reform and downscale businesses, out of those, JPY 800 billion in sales is for reform and downscale business. However, they have JPY 30 billion operating income.
Altogether, we have JPY 3.5 trillion and JPY 240 billion in OP, or 7% in OP margin. As I said earlier, there were I&I and made-to-order products, and there were some risks in the future, which were taken into account in fiscal year 2017. I&I made-to-order products, such as the steel-related and ship-related businesses, there was JPY 600 billion in sales. For this portion, the OP was a negative JPY 40 billion. Furthermore, for the new business investments, such as for MRJ, we had about JPY 70 billion negative impact. For the main businesses, you can see that the profitability of the main businesses has been kept at a certain level. The light blue portion, for this portion, next year onward, we are expecting some improvement in this area as well. That is our plan at the moment.
In terms of the improvement of balance sheet and strengthening of the financial position, our company has made certain commitment to this task. In terms of the strategy and tactics, we have segregated into three phases, step 1, 2, and 3. We have explained this to you earlier, I want to share with you the achievements. First of all, in terms of the controlling of unnecessary cash outflow, the cash conversion cycle inventory has been improved from 124 days to 108 days. In terms of the improvement of production efficiency, such as the asset efficiency and facility efficiency, we are able to improve the fixed asset turnover from 1.99 to 2.122. Realization of potential value of assets, we are trying to improve the clarification of the clarity or transparency of the assets that we have.
We are making a steady progress on this, we are trying to reallocate the investment into the assets with relevance with our main businesses. For example, we have sold off the MMC shares, we invested into a French nuclear power company. These activities led to the improvement in the cash flow and balance sheet. Next, I'd like to move on to the MRJ-related accounting. Earlier, I have been explaining for the new fiscal year, from the beginning of 2018, we are going to adopt the IFRS instead of the Japanese GAAP. Because of the change in the accounting standards, the MRJ-related assets treatment has been changed drastically. Going to the conclusion, wherever there is a MRJ investment, the investment recovery is accounted for from time to time. In terms of the recoverability, there is no change to the recoverability of the investment into MRJ.
Recovery is expected to be for the long-term basis for this. In the long timeframe, how to evaluate the risk is going to be somewhat conservative going forward. That was the change. Of the conservative accounting of MRJ-related assets, in the first year of the adoption of IFRS, we have booked JPY 400 billion MRJ-related assets to be depreciated and written off as a whole. The asset related to this is going to be zero in the new year. The total asset was reduced from JPY 5,500 billion to JPY 5,100. This accounting change was equivalent to FY 2013. Of this change, the balance sheet risk that we have has been dramatically improved. We have cleared all of these risks.
In terms of the cash flow that we are using, as I said earlier, all of the free cash flow has been already used to cover this. For the cash flow and the balance sheet for MRJ, we were able to clear up all of the MRJ-related assets once and for all. Based on this, in terms of the balance sheet, we have been significantly improving our cash position and the balance sheet position, especially when it comes to the cash position without the extraordinary items. The peak was 2014, then it's been going down, in 2017, it was JPY 5.4 trillion. In the next medium-term business plan, there are new indicators we have adopted. In terms of that, the balance sheet position is 1.1 times, which is a great improvement, which is also reflected into equity ratio and D/E ratio. They are also improving dramatically.
On the next page, you can see more details for each financial indicators, please look at them later at your leisure. Finally, I'd like to give you the forecast for fiscal year 2018. Based on the financial results for fiscal year 2017 and the prospect for fiscal year 2018, we have put together the forecast for fiscal year 2018, as shown on page four. With the IFRS to be adopted in the new year, we have indicated both of the figures for JGAAP and IFRS. The orders received, JPY 4.1 trillion. Net sales, JPY 4.2 trillion. Operating income under Japanese GAAP, JPY 175 billion. EBIT, JPY 160 billion. Ordinary income, JPY 170 billion. Profit attributable to the owner of the parent, JPY 80 billion. Including all of the extraordinary profit, JPY 160 billion is the EBIT.
In terms of the orders received and net sales, there are no changes. In terms of the equity, MRJ asset was reduced. Therefore, the ROE is 6%, EBITDA JPY 320 billion, and FCF JPY 50 billion. Overall, we are expecting increase in sales and profit. For free cash flow, because of the earlier improvement in balance sheet, for the next year, we are setting the free cash flow at JPY 50 billion, which is relatively low. Of course, we are improving the competitiveness. In terms of the dividend, we are expecting JPY 10 increase in the dividend payout next year to make the total dividend payment JPY 130. Assume the exchange rate is JPY 110 to the $ and JPY 130 to the EUR. You can see more details by segment on the next page.
This concludes my explanation on the financial results and forecast. Thank you.
My name is Miyanaga. I'd like to explain to you what we have in mind for the 2018 Medium-Term Business Plan. Moving on to the next pages. First, I'd like to go back to the 2015 Medium-Term Business Plan, page four. I'd like to speak about the management and the financial standing for the major KPIs. We have to say that there has been sluggishness in the expansion of the business size, also major underachievement of the operating income goals. There has been the sharp decline of the power market and also oil and gas and the steel structures. There has been a major decline, and we try to be agile in dealing with them. During the term of the 2015 Medium-Term Business Plan, we were not able to recover this with speed. We were not too prepared for that.
In thinking about the future, we decided that we should be prepared and try to come up with countermeasures for the unexpected. There has been a big delay in MRJ, and unexpected amount of expenditures have been incurred, which was the driving force behind the sluggish operating income, as has been explained by our CFO. In some areas, such as the free cash flow and others, for which we were able to exercise our control, we were able to have a major improvement. The extraordinary loss of the cruise ship and also operating income decline, the operating income and achievement, we were not able to achieve our goals, although we had exerted our best effort. We were not able to reach our goal of JPY 180 dividend. We had to remain in the level of JPY 120.
This is a summary for the 2015 Medium-Term Business Plan. Next page. We try to work on the asset management in the framework of cash flow management, we were able to achieve the major goals, and we made major progresses. For the 2015 Medium-Term Business Plan, actually, in terms of the changes and the reforms for the structure of organization and the systems, we have been working on this from the 2010 Business Plan, and we were able to complete everything related to this. We were able to complete the corporate governance reforms, which had been started from the 2012 Medium-Term Business Plan. We were able to complete these two. However, we try to work on the risk management because of the many issues that appeared in this period. Moving on, we were able to work on the business process improvement.
We were able to streamline some of the systems and the strategies and the principles. In the future, we will make sure that all the achievements would maintain the momentum. We have to have the development of global management personnel. We have to expand the outcome of the improvement. We have to create new businesses as well. Digitalization is another area. About the risk management, I will not explain this in details, but we have done various things, and some of them were effective. The one such success was the remedy for the SONGS. Well, we tried to do our best, but we were not able to save them, and we had to suffer a major loss. With this, we had learned a great deal, and we realized that it is important to be prepared.
With that in mind, we were able to deal with the crisis, the risks related to MRJ. It is important to have the high capability for the analysis. At the same time, we have to work on the soundness improvement for the corporate culture. We decided to introduce the system for SBU, the strategic business units. We have been working on the enhancement of education. Moving on, the 2015 Medium-Term Business Plan was very much centered around reforms and the countermeasures for crisis. All in all, as was mentioned, including this issue related to MRJ, we have been able to solve many of the major problems, and then some of them are remaining. Still, we can say that the 2018 Medium-Term Business Plan is meant for the first step to the trajectory for sustainable growth.
Certainly, we have to work on reforms. As I just said, it is important to have the deep penetration of the reforms effort. Please refer to the green areas. It is important to work on the efficiency improvement and the focus on the income. We have to make sure we do this with earnest. Our growth strategy should be in line with the changes of the time. It is important to have the resilience against uncertainty, and we try to be as effective as possible. Everything should have the result as soon as possible. The most important is to have the reform for the thermal power generation.
Moving on to the next page, what we have in mind is in the 2015 Medium-Term Business Plan, we aimed at JPY 5 trillion, but we were not able to reach that at all. Again, in 2018 Medium-Term Business Plan, we try to aim high again, JPY 5 trillion, and also ROE of 11%. This is our goal. Certainly, the path towards that would be very thorny. We would like to recover our market cap. We try to have the next goal of TripleOne. The basis here would be the establishment of the business, the structural reform, domain systems, and the risk management structures. Also, as was mentioned, it is important to continue working on this. Again, we have to reemphasize the domain system, and we have to, again, restructure the domains in the 2018 Business Plan.
If it is possible to drive the changes within the entire organization, we will have higher efficiency that will be conducive to the realization of TripleOne goal. Long-term visions and the growth strategies are very much based on all these. About TripleOne proportion concept, as can be seen here, what we are trying to do as MHI, it should be based on our history and our strengths and our total asset structures. Everything should be driven by this. This way, we decided that the most appropriate proportion of the net sales, total asset, and market cap should be 1 to 1 to 1. However, there will be some changes based on the changes of the times, but still, at this moment, we'd like to have this TripleOne proportion.
The business size or the corporate size of the sales would be JPY 5 trillion. Based on our experiences, JPY 5 trillion is a very good goal. About the details. It is important to have the total asset size. We have to adjust ourselves for the demands and requirements of our customers. We have to change ourselves continuously so that it is possible to maintain this, so that it is possible to have the high efficiency in quality and the quantity. Total asset will be most effective. Based on this, it is important to have the maintenance of the sound and consolidated financial standing, and that's what we have as a TripleOne proportion, TOP. Moving on to the next page, MHI FUTURE STREAM.
Well, this has not been a part of our DNA in the past, but this is the kind of concept we have. The management and also corporates should aim for that. In the past, we have been thinking that what we had to do was to have good products, this way, we are able to have dominance in the Japanese market. It would be possible to have dominance in the markets outside of Japan. Now things are changing. The social structures and the industrial structures are changing rapidly. We have to try to understand what kind of current we are in, what kind of situation we are in, and try to come up with a viable long-term vision. We have to work on the evolution of this with the elaboration of what we have to consider.
This is on the left-hand side. We have our technologies, in the near future, we grow them into something viable, in the distant future, we have something that is needed in the future. This is the timeframe and the kind of goals we have for everything we do. I talked about 2018. As the 2018 figure has been already explained, I will not speak about this, about the 2020 goal, as I said, the orders received should be, the figure should be JPY 5 trillion. There could be some constant figures. Again, the JPY 4 trillion-JPY 5 trillion, also we have the turbochargers and forklift trucks, some of them are able to maintain its goal. That means that I think it is possible to have the JPY 4.6 trillion.
We have more allocation for the growth and maintenance areas. Including this, then we added the JPY 400 billion. About the income, the figure is JPY 340. This is conservative. Again, the margin is something we have to consider. The peak will be to 2018. There have been increase of the expenditures from 2016 to 2017 and 2018. This will remain at high level till the year 2020. We have to be conservative here. Next page. This is for the 2018 to 2020. In 2018, if you take a closer look at it, we have the figure here is the net income of JPY 170 billion. Again, with the change of the IFRS, the introduction of IFRS, we have to have a different approach.
For the 2030, we have been working on the programs in which they collect the investment recovery should be done until 2030. The things have not changed at all.
No problem.
We have no change in the projection for the long-term recovery of investment for a long time. However, with the introduction of IFRS, it is important to understand the bottom line. For the 2018, the expenditures. In some of the things which is very much toward the asset, I think it is important to have the decline here for the long term. In 2020, this part would come back. That's the reason why we have these figures. With the IFRS, this would look better compared with 2018. Moving on to the next page. Please go to the next page. As I said earlier, the financial position or balance sheet has been strengthened to the level that we are happy with.
Therefore, in the next medium term, we like to think about the earnings contribution, because in the past, we were inclined towards the long-term investment or at least a medium-term investment, the CapEx and as well as the alliances, M&A. All these activities were focused on the long term.
-benefit. Recently, for the medium lot machinery and the UniCarriers, we are making more quick win investments and mergers and acquisitions. These are the kind of investments that we would like to increase. Therefore, the new investments in MRJ, we are allocating more funds for this aspect. On the next page, please. I earlier mentioned some of the megatrends and Future Stream as well. Among them was climate change and digitalization. There were several different keywords which are most relevant for our company. Thinking about these as context, each domain is formulating the business plan and how they are growing their business going forward. These are the keywords. For the Power Systems business, they are going into the transition period in energy. In the Industry & Infrastructure, they have to think about the society, logistics, environment, and so forth.
Aircraft, Defense & Space, they have to think about the new area development and new cybersecurity type of businesses going forward. These are included in the Medium-Term Business Plan. On the next page, 4 onward, by each domain, we have put together some of the key points, which segment and which entity is working on what activities are shown here. I will not go into the details, but basically, we are focusing on the stability in the next business term. We are segregating what we have to do today and we have to do in the future so that we can focus on the short-term tasks, which are essential for the future business. For the by domain explanation meeting, each domain head is going to take you through the details. I will not go into the details here.
I'd like to move on to the MRJ explanation. In January last year, we have given you some detailed explanation. In November 2016, because of the difficult situation, I took charge of this business. The gray area is something that we have already explained to you. After that, things are getting better since then, and the recent e-project has been showing steady progress. In summer this year, in Farnborough, there will be a demonstration flight this year in the summer. A demo flight is being scheduled. For the type certification approval, in order to get the final confirmation, we will have the latest electrical wiring testing, and a model for that is being constructed so that next year we can start the testing.
Also, we will get the TC approval, and in the middle of 2020, we should have a delivery of the medium lot machinery, the first lot product to ANA. Next page. Up until last year, FY 2017, the MRJ investment amounts for development and startup, and MAC startup. For all of the things that we were able to write off, we have already done that. For the long-term investments, we had not written off yet. This year, at the end of fiscal year 2017, 400 billion JPY has been already written down as well. Therefore, the rest we have is in terms of Mitsubishi Aircraft Corporation. We will start with whatever is already finished. Therefore, we have a very clean slate to start with. The only thing that is left is the excess liability of the company. We have to clear this, otherwise it will be difficult.
This year, we would like to increase the equity of this company, and we have to negotiate in different fronts from now, so we can't tell you the details. But within this fiscal year, we would like to resolve all of the excess liability so that from spring of next year, we will have a new structure and we will start working on new businesses. For example, the fusion with the Tier 1 business and the new organization structure, so that we can have a drastic review of the structure of the business and make a new start. After the MRJ90 , we will launch the MRJ70, and we would like to swiftly do this as well. On the next page, you can see the power business situation. In fact, especially for the thermal power business, fossil power business, there are gas-based and coal-based power business.
As you can see on this graph, last year, I said it would take another two or three years, but from now on, for the next two years, we will not have a quick growth. We can grow the service business. In 2021 onwards, the gas market is likely to recover little by little. Furthermore, after 2021, we are expecting a decline in coal business. We have some pipeline, and for the coal, we are not losing everything, because some of the businesses will be still remaining. For the decline portion, we can cover up for that with the gas business for the coal. In terms of the OP, we thought that two years ago, we had already seen the bottoming out of the OP. From last year onward, because of the PMI and so forth, we are already in the recovery track.
In the next three years, we have to make sure that we will prepare for the reduction of the coal-based thermal power business. Because we are expecting low carbon or a carbon-free society, we have to further enhance our gas turbine in preparation for that. Utilizing gas turbine and using AI and software, we would like to find new business opportunities. In terms of the human resources allocation in Europe, we have already started the review, and the rest will be also done. Up until 2021, we will be busy, but after 2021, we should be able to do many new initiatives. That's why we are preparing the human resources for that. Basically, there are some attrition, and we are reducing some of the people. Otherwise, we will be reallocating the existing people to different areas. That's for domestic business.
For the international business, the boiler and steam turbine business will have to be improved. Next page, please. As I said, for the hardware, we will be continuously evolving what we already have in terms of the gas and the distributed power source and steam turbine and the CO2 recovery equipment. We will continue to evolve these hardware business. At the same time, we will increase the lineup of services businesses to support these hardware, while increasing the capability with the software side. This is something that we would like to move on to quickly. The details are available in the attachment, so please refer to that later. Also, in the upcoming seminar of each domain, the head of each domain should give you more details. Next, I would like to talk about the global management.
When we think about global management, our focus used to be Japanese business in the past, but as we try to achieve JPY 5 trillion business, we can tell that the Japanese market is already matured. There will be some de-focusing from the Japanese market. In terms of the R&D, there will be some increase in investments. In terms of the balance, we think that the Japanese business is already saturated. The areas where we see potential is North America as well as Asia-Pacific regions. In those two regions, we would like to focus, as well as on other international businesses. Next page, please. In order to promote what I have just explained, we need to improve the global management structure and organizations. We have to make many changes for the global headquarters. We are preparing for this.
In the first half of this fiscal year, in November or so, at the upcoming analyst meeting for the first half, we will give you the global management presentation, including the human resources aspects, how we are enhancing the capabilities of the human resources. In terms of the concept, we will have clear roles and responsibilities between global and Japan and so forth. Next page, please. Earlier, I talked about the MHI FUTURE STREAM. As we promote this initiative, because of the drastic changes in society and the markets, we have to have a shared technology pool so that we can maximize the utilization of supply chain technology and other capabilities of the organization as much as possible. We should be efficient in utilizing these latest technologies, such as the market sensing capability, which we are focusing on right now. That alone is not sufficient.
We cannot do everything only in-house. We have to have external resources, insights, and technologies to be incorporated into our business more proactively. Therefore, we have Research & Innovation Center, as well as different countries, institutions, and startup companies. We would like to collaborate with them so that we can get more effect from those technological developments. This is a cycle that we would like to achieve in terms of the utilization of different resources, internal and external. Next page shows the culture and human resources development. After the structure reform, what we have to focus on is this. From 2010, we have been focusing on the transformation, there were so many changes, and we clarified what we have to do already.
However, going forward, what we have to do is, based on the long-term vision, we have to make sure that the younger resources and the medium-level managers will be engaged and motivated so that we can have better organizational capabilities. That is the driver for future growth. At the same time, I often say that we have to become a global company, although the origin is still in Japan. In order to achieve this vision, we have to tap into more diverse human resources and enhance global talents. We also have to have the regional headquarter management talent who can become the leaders of the international businesses. We will make more efforts to secure and nurture these talents going forward. The status of these initiatives will be shared with you at the analyst meeting at the end of the first half of this fiscal year.
We will start wherever we can and try to promote this as much as possible. All in all, with the medium-term business plan that we have, we believe that we can go into the growth trajectory. In MTBP 2015, we did whatever we could do. With MTBP 2018, we would like to make a clear path to the growth trajectory. In terms of the earnings forecast, we are being conservative for MTBP 2018. This concludes my remarks. Thank you very much.