This is Fukumoto, General Manager of Finance and Accounting of IHI Group. I will explain IHI Group's financial results for the fiscal year 2022 based on the PowerPoint presentation materials disclosed at 3:00 P.M. today. This page shows the contents of today's presentation. Please turn to page four. This slide shows an overview of the results. In fiscal year 2022, IHI Group achieved increase in revenue and profits and restored profitability in all the reportable segments, with a record high operating profit close to JPY 90 billion. In the civil aero engines business, the trending sales of spare parts remained solid, in line with the recovery in air transportation demand. Profits further increased due to more than expected depreciation of the yen, as well as improved profitability. In the vehicular turbochargers business, although sales have recovered moderately, they are not yet as strong.
Challenges still remain, as we have not been able to sufficiently pass on soaring prices of raw materials to contract prices. Other businesses overall remained steady. As for cash flows, there was an increase in working capital, which remains as a challenge. However, we believe that we have been able to establish a solid foundation to generate cash. I will explain details using the following slides. Please turn to page 5. This slide shows the consolidated results, including orders received and the financial summary. As you can see, there are no major changes from the forecast as of the third quarter earnings announcement on February 7th, which is shown at the top left corner of each item for reference. Orders received was JPY 1,366.1 billion, up 8.3% year-on-year.
Revenue was JPY 1,352.9 billion, up 15.3% year-on-year. As shown at the bottom of the table, the average exchange rate for revenue was JPY 134.32 to the US dollar. There was significant yen depreciation by JPY 21.64 from the previous fiscal year. Operating profit increased by JPY eight billion year-on-year up to JPY 89.5 billion. Excluding the JPY 59 billion impact from large scale asset sales recorded in the operating profit of the previous fiscal year, the group's earnings capacity increased roughly by JPY 67 billion, as we reap the benefits from various initiatives which we worked on as performance recovery drivers.
Profit attributable to owners of parent was JPY 52 billion due to recording foreign exchange losses and deterioration in share of profit and loss of equity method investments, among other factors. Please turn to page 6 for orders received and order backlog by segment. Orders increased except for Social Infrastructure and Offshore Facilities. In particular, orders increased significantly in Industrial Systems and General-Purpose Machinery, air, and Aero Engine, Space and Defense. The decrease in orders for Social Infrastructure and Offshore Facilities was attributable to the impact in the Bridges and Watergates business that booked multiple large scale orders in the previous fiscal year. In Industrial Systems and General-Purpose Machinery, orders increased in many businesses, including vehicular turbochargers, which is recovering from production adjustment. In Aero Engine, Space and Defense, orders mainly increased in civil aero engines.
As shown on the right, order backlog at the end of March was JPY 1,299.4 billion, up JPY 34.44 billion from the end of the previous fiscal year. Please turn to page seven for revenue and operating profit by segment. The group recorded increase in revenue and profit and achieved profitability in all the reportable segments. In Resources, Energy and Environment, revenue and operating profit increased, mainly due to the progress of construction in nuclear energy. In Social Infrastructure and Offshore Facilities, revenue and operating profit increased due to higher sales in Bridges and Watergates, as well as profitability improvement in bridges projects overseas.
In Industrial Systems and General-Purpose Machinery, operating profit increased on higher sales centered on vehicular turbochargers, Heat Treatment and Surface Engineering, and rotating machinery, although the impact from soaring raw material prices remained in some businesses. In Aero Engine, Space and Defense, operating profit turned positive at JPY 43.7 billion, up significantly year-on-year due to recovery in sales of spare parts for civil aero engines, yen depreciation, as well as the progress in the initiatives aimed at improving profitability. Adjustment includes the impact from last year's asset sales. I will explain the situation regarding civil aero engines and vehicular turbochargers using pages 9 and 10 respectively. Please turn to page eight. This is a breakdown by segment of the year-on-year increase in operating profit. Change in revenue had JPY 20.3 billion positive impact on operating profit.
Some of the factors for profit growth include higher sales of spare parts in civil aero engines, the progress of construction in nuclear energy, and recovery in sales of vehicular turbochargers. Change in construction profitability pushed up operating profit by JPY 22.9 billion. Although there was impact on operating profit, such as soaring raw material prices in the vehicular turbochargers, the parking and Logistics Systems and industrial systems businesses in the Industrial Systems and General-Purpose Machinery segment, change in construction profitability overall made substantial positive contribution to profit, mainly due to a decrease in burden of the program-related costs associated with improved performance of new engines, in addition to the effect from ongoing cost reduction efforts for new engines in the civil aero engines business. The positive impact from the change in foreign exchange rate was JPY 26.2 billion, centered on civil aero engines.
Change in SG&A pushed down operating profit by JPY 12.4 billion due to increased R&D expenses, in addition to the increase in cost, along with the reopening of economic activities, among other factors. Change in other income and expenses is mainly attributable to the impact from sale of assets in the previous fiscal year. Now please turn to page nine for the situation regarding civil aero engines. The graph shows a trend of quarterly revenue of civil aero engines in bars and changes in spare parts transaction volume in a solid line. Overall, the recovery trend for sales of spare parts for fiscal year 2023 remains unchanged, in step with recovery in air transportation demand. Please turn to page 10. This page shows changes in the number of deliveries of vehicular turbochargers and revenue by region on a quarterly basis.
As you can see at the bottom graph, which shows a monthly trend of the number of deliveries, the impact from the spread of COVID-19 in China waned, and a recovery was seen from December to January. However, the recovery still remains moderate, and we will closely monitor how it will trend in fiscal year 2023. Please turn to page 11 on finance income and costs. As you can see at the bottom of the page, the yen depreciated at the end of the fiscal year compared to the beginning of the year. JPY 5.7 billion foreign exchange losses were recorded due to non-elimination of FX losses, which were recorded along with a rapid correction of the weak yen toward the end of the calendar year. Share of loss of investments accounted for using equity method was JPY 8.3 billion.
Although the results of Japan Marine United was broadly in line with expectations, it recorded losses of more than JPY 10 billion due to the impact from increasing steel and equipment and raw materials costs. Please turn to page 12, financial position. Total assets were JPY 1,949.5 billion, increased by JPY 69.8 billion from the end of the previous fiscal year, as trade receivables increased following the good progress in large-scale projects and as a result of accumulated inventory following the increase in procurement costs and delay in the procurement delivery time. Interest-bearing liabilities, the number in the middle of the chart, was JPY 519.4 billion. Total equity was JPY 463.7 billion, increased by JPY 56.7 billion. As a result, debt-to-equity ratio was 1.12 times.
Ratio of equity attributable to owners of parent was 22.5%. Page 13, consolidated cash flows. Cash flows from operating activities, excluding the working capital shown as subtotal, should be reflecting the actual cash generation ability, did increase to a level exceeding JPY 100 billion. Due to the increase in trade receivables and inventory, operating cash flows stayed at JPY 54.1 billion. We believe our initiatives to strengthen cash generation capabilities have started to bear fruit for sure, although working capital has increased as sales increased and supply chain-related risks have come to the surface. IHI Group will continuously promote initiatives to further shorten the cash conversion cycle. Cash flows from investing activities was negative JPY 52.3 billion. Free cash flow was JPY 1.7 billion. On Page 14, you will see the actual results of R&D, CapEx and depreciation.
On page 15, revenue by region and assets balanced by segment. Please take a look at them later. Next is the forecast of the consolidated results for fiscal year 2023. Please turn to page 17. Fiscal year 2023 is going to be an important year, the first year of Group Management Policies 2023, which will be explained by the CEO, Mr. Ide, later. In order to realize the reform set forth in the management policy, IHI Group will secure JPY 100 billion operating cash flow on a stable manner and boldly shift management resources to growth and development businesses and execute investments using the generated cash.
Proactive investments in human resources for future growth and R&D, JPY 10 billion equivalent structural reform related expenses are incorporated in the assumptions, still will secure greater operating profit than fiscal year 2022. Please turn to page 18. Orders received is expected to be JPY 1.5 trillion. Revenue, JPY 1.45 trillion. Details of the JPY 90 billion operating profit will be explained on the next page. FX rate assumption for US dollar is JPY 130. JPY 1 move will have approximately JPY 1.4 billion impact on the operating profit. Shareholder return. Based on the 30% payout ratio guideline under IHI Group dividend policy, this year's annual dividend will be JPY 100, up by JPY 10 from fiscal year 2022. Page 19, please.
Analysis of change in operating profit from the previous fiscal year with the breakdown under the Group Management Policy 2023. Aero Engine, Space, and Defense, the growth business, aim to grow the operating profit by increasing the sales of spare parts following the aviation demand recovery and improving the productivity of newly made engines. Three non-aero businesses, i.e. core businesses, is expecting decrease in new boiler projects and nuclear energy business. IHI will continuously expand the life cycle businesses and appropriately transfer the higher input costs into the sales prices. Through cultivation of the fruit of these initiatives, IHI is aiming to generate greater than JPY 90 billion operating profit while making proactive growth investment. Breakdown by segment will be explained on the next page. Please turn to page 20. Orders received forecast by segment. Social Infrastructure. Orders received expected to increase in Bridges and Watergates.
Aero Engine, Space and Defense. Orders received for engine business expected to increase in the businesses with the defense ministry and civil aero newly made engines and spare parts. Page 21. Revenue and operating profit forecast by segment. Let me talk about increases and decrease in revenue on this page. Changes in profit will be explained on the next page. Revenue is expected to increase in all reportable segments. Again, Aero Engine, Space, and Defense, the growth business. Sales generated by civil aero engine businesses are expected to increase as aviation demand keeps recovering. Please turn to page 22. Analysis of change in operating profit from the previous fiscal year by segment and by factor.
Resources, Energy and Environment, one of the core businesses, operating profit will flattish year-on-year, while sales in nuclear energy is expected to decrease, Carbon Solutions related life cycle business is expected to expand and profitability improvement expected in Power Systems. Social Infrastructure, one of the core businesses, operating profit is expected to decrease since investment purpose property sales was recognized as part of other income and expenses during fiscal year 2022 under Urban Development business. Industrial Systems and General-Purpose Machinery. Although the business environment is expected to be continuously tough, JPY 5.9 billion increase is expected by appropriately transferring higher input costs into our sales pricing and by expanding life cycle businesses.
Aero Engine, Space and Defense, the growth business, although will be affected by effects and increase in newly made engine sales and increase in R&D expenses, IHI will secure additional JPY 7.2 billion profit through increase in spare parts sales, capturing the recovery in aviation demand and decrease in costs to make new engines. Adjustment does include JPY 10 billion structural reform related costs to accelerate the speed of business portfolio transformation. Page 23, please. Cash flows forecast. Cash flows from operating activities in fiscal year 2023 is expected to be JPY 100 billion. IHI Group will further strengthen cash generation capability to secure investment funds to realize transformation and will control increase in working capital, which is one of the challenges IHI Group is aiming to overcome.
Cash flows from investing activities will be JPY 100 billion cash out after making investment in equipment and in businesses. Free cash flow will be close to ±0. Page 24 onwards are financial results by segment and appendices as usual. Please take a look at them later. This concludes our presentation. Mr. Ide, President and CEO of IHI Group, will explain Group Management Policies 2023.
This is Hiroshi Ide. I will explain the Group Management Policies 2023, which is starting from this fiscal year. Let me start by reviewing the Project Change, which started from fiscal year 2020, and then I will explain contents of the Group Management Policies 2023. Regarding results of Project Change. As you can see on the page, toward Group Management Policies 2023, we have worked on Project Change, positioning it as a preparation period for reforming businesses in response to changes in the operating climate. It consisted of 2 strategies. One is to return to growth trajectory against such changes in the business environment, such as COVID-19 and carbon neutral. Is to create a new business pillar as Aero Engines.
As you can see, in fiscal year 2022, the final year of Project Change, against the original target of operating profit margin of 8%, we achieved 6.6%, falling short of the target. In fiscal year 2022, without sale of fixed assets, we recorded 6.6% operating profit margin. As explained earlier by General Manager of Finance and Accounting, we were able to post the record high level of operating profit. First, as regards returning to growth trajectory, as you can see in the waterfall chart from fiscal year 2020, originally based on Project Change, we identified four items as performance recovery drivers, which were recovery of the market environment, expansion of life cycle businesses, reinforcement of the cost structure, and reformation of the business structure.
Among them, mainly three drivers, which are expansion of life cycle businesses, reinforcement of the cost structure, and reforming the business structure, drove JPY 61 billion growth in operating profit. During the period, we particularly focused on expanding life cycle businesses. The target set in Project Change was to grow life cycle businesses in three non-Aero businesses by 30% against fiscal year 2019. We overachieved the target by growing it by 35%, which is one of the major results of Project Change. From the next page onwards, I would like to introduce to you some of the examples of another pillar of Project Change, which was to create new businesses. What I'll be explaining are basically the contents already announced with press releases.
These initiatives in which we have made progress will serve as a foundation for driving growth of the IHI Group going forward from this fiscal year as growth businesses and development-focused businesses, which I will explain later. First example on this page is that we at IHI Group succeeded in achieving the world's first power generation with a gas turbine completely fueled by liquid ammonia. With that success, as you can see at the bottom of the page, we signed memorandum of understanding with GE of the United States to develop large-scale gas turbines. This initiative has already been started with a view to developing gas turbines that can operate on 100% ammonia in 2030. These initiatives are highly valued in the world. We believe that these will be very important steps for growth businesses of IHI Group in the future.
Moving on to the next page, I'm sure that you're all familiar with the project at Hekinan Thermal Power Station. In accelerating this effort, we decided to bring forward the schedule by one year to start 20% co-firing of fuel ammonia in March 2024. IHI also decided to invest in the US company NuScale and participates in its small modular reactors project. Along with the ammonia projects, this is another initiative in nuclear energy related to carbon neutral. Two initiatives on the following page are both on the joint development of catalysts with a research institution affiliated with the Singapore Agency for Science, Technology, and Research. As for the methanation project at the top of the page, IHI has already received an order. Although it's still small in scale, we will work on expanding the project moving forward.
Similarly, we have started a project to develop catalyst for SAF synthesis. Other examples related to Aero Engine and Space. The one on the top of the page is a satellite project. IHI signed MOU with Northrop Grumman Corporation of the US to collaborate on satellites. The bottom one is on IHI's participation in Japan, the U.K., and Italy tri-national next generation fighter development program. These initiatives are also very important for IHI's future growth. Initiatives on the next page are also in Aero Engine and Space. To expand life cycle businesses in Aero Engine, IHI started operations of Tsurugashima Works. In anticipation to move toward electrification in the aircraft system in the future, IHI has succeeded in developing a prototype of a high-power electric motor for aircraft propulsion systems.
Next page, in the move toward electrification, it's decided that IHI's Electric Turbocharger is to be installed in fuel cell system for commercial vehicles. Another initiative involves utilization of data from space, an extension of the aero engine and space business. IHI and Sumitomo Forestry established a joint venture tropical peatland consulting company. We are to expand activities together with Sumitomo Forestry. That concludes review of Project Change and progress of various initiatives so far. I would like to start explaining Group Management Policies 2023. We've just reviewed Project Change, which was positioned as a preparation period for business transformation. As regards returning to growth trajectory, we achieved record high level of operating profit in fiscal year 2022. As for expanding life cycle businesses and reinforcing the cost structure, we delivered results to a certain extent.
In creating growth businesses, as I have just explained, various initiatives are beginning to be well underway. In these regards, the original purpose of Project Change, which was to prepare for business transformation, is being fulfilled. On the other hand, instability in societies has become the norm, such as COVID-19 and geopolitical instability, including issues in Ukraine. Under such business environment, we feel we need to further enhance corporate strengths. With Group Management Policies 2023, we are shifting from preparations to executions of transformations. We have formulated Group Management Policies 2023 with two aspects in mind. One is business transformation to achieve strong, sustainable growth, and another is transformation into a company that can quickly respond to disruptive environmental changes.
Let me briefly talk about the framework of the management policies. On the left, under group corporate strategy, you will see the social issues to be tackled. IHI Group, while expanding life cycle businesses through Project Change, has been providing value to the clients by taking client-side life cycle into consideration, which IHI could confirm has been enabling not only our clients to enhance their value, but also IHI to keep growing persistently. IHI Group has been working on various initiatives related to ammonia value chain as well. Importance of promoting businesses with value chain-oriented view is another aspect we have been able to learn through Project Change. Under the Group Management Policies 2023, IHI Group is fully determined to focus on the life cycle and value chain. Talking about IHI Group future businesses portfolio, as you see on the page, the portfolio should consist of the following three businesses.
First is the core businesses. Businesses under the core businesses can be considered as traditional businesses. They are Resources, Energy and Environment, Social Infrastructure, and Industrial Systems and General-Purpose Machinery. These businesses will not be maintaining as the status quo, and we are not going to see just an extended versions of these three businesses. IHI Group, first of all, design growth scenario of these businesses and evolve the life cycle businesses which are already growing and keep generating cash steadily is going to be the mission of these core businesses. In the meantime, IHI Group will focus on growth areas, i.e. growth business and development focused business. Aero Engines and Space are growth businesses, and clean energy is the development focused business. IHI will make a bold shift of management resources to these businesses. To make it happen, IHI Group need to transform itself.
Specifically speaking, IHI Group will develop and recruit human resources to facilitate transformation and advance digital infrastructure. Growth businesses are, again, aero engines and space. These have been the driving forces till today and will be even stronger driving forces from now on. IHI Group will not only focus on civil aero engine, but also on defense and rocket businesses. Here again, life cycle and value chain viewpoint is going to be very important. Meaning, for example, for aero engine business, we are not only talking about engine production, but also material business and establishing new engine maintenance site. We should be able to strengthen the aero engine business with life cycle viewpoints. With value chain viewpoint, lighter weight engines, electrification and SAF synthetic fuels should become the driving forces in the future.
Talking about rocket business, in addition to rocket production, rocket launching service and with life cycle viewpoint using space, land and undersea data should be the businesses with growth opportunities. Moving on to the development focused business, IHI considers ammonia and carbon recycling as clean energy businesses and is aiming to grow these businesses to make them as big as aero engine and rocket businesses. Fuel business in particular, IHI believes it makes a lot of sense for IHI to get involved with these businesses. Since unlike traditional fuel, which has reserve related risk, these new fuel such as ammonia and e-methane have more engineering risk. IHI has been focusing on combustion related for the time being, but would like to proactively make investment in production related and develop the businesses. Next is another topic related to development focused business.
Here are some examples of the initiatives IHI has been working on together with overseas institutions and corporations over the past two years or so to develop the value chain. At any rate, things are happening quickly. IHI believes that we have been able to be the leader in the combustion area, but would like to further accelerate the speed of the business growth while developing the value chain. Next page, core businesses, i.e., Resources, Energy and Environment, Industrial Systems and General-Purpose Machinery and Social Infrastructure. IHI will accelerate the speed of growth by expanding the business scope from only focusing on IHI product life cycle, which is the initiative IHI has been working on under Project Change, to focus also on other life cycle businesses, including client side upstream and downstream businesses, non-IHI products and peripheral equipment. On the next page, you will see some simple examples.
The example on the left is related to power generation. Life cycle businesses can expand from maintenance business to also cover plant peripheral equipment manufactured by competitors, fuel conversion and promoting carbon neutrality achievement. Example on the right is about deep diving and evolving life cycle businesses through carbon dioxide emissions reductions, automation and labor saving in factories and industrial parks. For industrial park projects, industry machinery division and energy division are working together to save our clients energy. One more thing important related to the core businesses is further business structural reform. It is about enhancing business strength and initiative IHI has been already working on under Project Change. I will skip the details since it is going to be repetitive, but we will continuously work on several structural reform as we have been working on till today, or even work harder than now.
IHI will also work on business portfolio optimization. Business with low efficiency will of course be restructured. I have been discussing how to develop growth scenario together with business units since December last year, and will keep revisiting the business portfolio over the coming year. Next is about capability of realizing transformation. Developing value chain is something IHI does not have expertise, and in the meantime, digitalization is progressing. Under such an environment, needless to say, it is inevitable to develop and recruit innovative human resources and advanced digital infrastructure. IHI will work on them and make investment in these areas. Next is resource allocation and management targets. IHI has no option but to make investment in growth and development-focused businesses.
As of now, IHI is expecting to make JPY 500 billion investment during the coming three years and to make it happen, IHI aims to generate ongoing operating cash flow of JPY 100 billion or more. Management targets to be achieved by fiscal 2025 are 7.5% operating profit margin, 8% or higher ROIC, and 100 days cash conversion cycle. Shareholder returns, no change with the basic policy of stable dividends, aiming for a consolidated dividend payout ratio of 30%. Next page, factors in operating profit changes between fiscal 2022 and 2025. As explained on the slide, IHI would like to proactively make investment in human resources and R&D. Investment size is expected to be JPY 90 billion in fiscal year 2023.
Operating income level before these costs and investments will be very high, but IHI aims to make proactive investment, including structural reforms.