Promoting overseas local operations

「Because of their significance, 西宮環境テクノロジー株式会社, Kanadevia Inova South Africa (Pty) Ltd, 南魚沼環境テクノロジー株式会社 and Kanadevia Inova Low-C Energy Limited, which were established during the interim period, and Kanadevia Inova BioValue B.V., Kanadevia Inova BioValue Construction B.V. and Kanadevia Inova BioValue O&M B.V., whose shares were acquired during the interim period, have been included in the scope of consolidation.」

「2026年度についても、「Forward 25」の基本方針に基づき、重点施策を継続して推進しております。」

「Forward 25 の基本方針を継続し、引き続き海外事業および重点分野へのリソース投入を実施するとともに、グループガバナンスの強化を図りながら、事業の成長ならびに収益力の向上に取り組んでおります。」

「In fiscal 2025, the growth of Kanadevia Inova AG.'s Waste to X business, particularly its Renewable Gas business involving the conversion of waste into gas and energy, brought the overseas sales ratio for the Group as a whole to 51%. Kanadevia Inova AG. and its group companies have continued to pursue proactive M&A and business investment. In the United States, they acquired Matrix Power Services, Inc (now Kanadevia Inova Matrix Services US LLC), a company related to waste-to-energy plants, and in Denmark, they acquired intellectual property rights from Babcock & Wilcox A/S relating to combustion equipment and other components for waste-to-energy plants. We are also expanding our business in Southeast Asia, including by receiving an order to construct a waste-to-energy plant in Malaysia, and opened a regional headquarters for the Southeast Asian business in Thailand.」

「Because of their significance, Kanadevia Inova Matrix Services US LLC, Timberforce A/S and AKY Biomethane Società Agricola A.R.L., whose shares were acquired during the interim period, and カナデビアバイオ株式会社 and 成田アクアテクノロジー株式会社, which were established during the interim period, have been included in the scope of consolidation. In addition, 上海昱造環境技術有限公司, which was an equity-method affiliate in the previous fiscal year, has been included in the scope of consolidation because it became a subsidiary through an additional investment.」

「In fiscal 2024, growth in Kanadevia Inova AG.'s Waste to X business brought the Group-wide overseas sales ratio to 49%, enabling the Company to achieve ahead of schedule its target of 40% set for fiscal 2025.」

「The Company's consolidated subsidiary Kanadevia Inova AG. (now Kanadevia Inova AG.) acquired shares in Babcock & Wilcox Renewable Service A/S on 28 June 2024.」

「Focusing on waste-to-energy, nuclear-related, and water businesses, we will work together across the Group to expand these businesses in our existing priority regions of Europe and East Asia, our priority growth regions of Southeast Asia and South Asia, and our new-market regions of North America and the Middle East, with the aim of achieving an overseas sales ratio of 40% in fiscal 2025. To this end, we will review our organisational structure to facilitate proactive investment and unify our global business strategy.」

「ひろしまエコグリーン株式会社, Hitachi Zosen Inova Renewable Gas Apensen GmbH and Hitachi Zosen Inova UK Operations Ltd., which were established during the third quarter of the current consolidated fiscal year, were included in the scope of consolidation due to their materiality. Biometano Tuscia S.r.l., whose shares were acquired during the same quarter, was also included in the scope of consolidation due to its materiality.」

「EST Industries SAS, whose shares were acquired during the second quarter of the current consolidated fiscal year; its subsidiary Sentis Sud Atlantique SAS; and its affiliates Enodtis SAS, FB2M SAS and Dampfkesselbau W.A.M.S.E.R. GmbH were included in the scope of the equity method due to their materiality. Apensen Verflüssigungs Management GmbH, Apensen Verflüssigungs GmbH & Co. KG, Blankenhain Verflüssigungs GmbH and Sigma-NAC Nuclear Solutions, LLC, which were established during the second quarter of the current consolidated fiscal year, were also included in the scope of the equity method due to their materiality.」

「During the current consolidated fiscal year, Hitachi Zosen Inova AG acquired Steinmüller Babcock Environment GmbH (now Hitachi Zosen Inova Steinmüller GmbH) to expand its services and other businesses for waste-to-energy facilities.」

「As part of this transaction, HZI entered into a share transfer agreement with 日鉄エンジニアリング㈱, a shareholder of SBE, on 9 December 2021.」

「Schmack Biogas Service GmbH, whose shares were acquired during the third quarter of the current consolidated fiscal year; CAE Technology Co., Ltd. and its subsidiary Lotus System Vietnam Co., Ltd., in which investments were completed during the same quarter; and あきた白神環境テクノロジー㈱, which was established during the same quarter, were included in the scope of consolidation due to their materiality.」

「Waste Treatment FZCO, which had been included in the scope of the equity method in the previous consolidated fiscal year, was included in the scope of consolidation during the second quarter of the current consolidated fiscal year because the Company's effective control had strengthened.」

「NAC LPT LLC, in which an investment was completed during the third quarter of the current consolidated fiscal year, was included in the scope of consolidation due to its materiality.」

「Because of their significance, Europeenne de Services Techniques Pour L'incineration and Negoce Casting Incineration Services, whose shares were acquired during the first quarter, have been included in the scope of consolidation.」

「HZI-PJD Limited, in which an investment was completed during the first quarter of the current consolidated fiscal year, and 青森西北沖洋上風力合同会社, which was established during the same period, were included in the scope of the equity method due to their materiality.」

「HZI-PJD Limited, in which an investment was completed during the first quarter of the current consolidated fiscal year, and 青森西北沖洋上風力合同会社, which was established during the same period, were included in the scope of the equity method due to their materiality.」

「To ensure the achievement of these numerical targets, the Company will steadily implement measures to improve profitability by strengthening local management at overseas subsidiaries and structural reforms to reduce costs and improve efficiency in underperforming domestic businesses, while also pursuing the measures below to lay the groundwork for the next medium-term management plan.」

「Because of their significance, Kit Sanriku Aqua Service Co., Ltd. and Hitachi Zosen Inova Rus LLC, in which investments were completed and which was established, respectively, during the third quarter of the fiscal year, have been included in the scope of consolidation.」

「HZI Jönköping Biogas AB and Hitachi Zosen Inova Canada Ltd., in which investments were completed during the second quarter of the current consolidated fiscal year, were included in the scope of consolidation due to their materiality. Shanghai Kangheng Yuzhao Environmental Technology Co., Ltd., in which an investment was completed during the second quarter of the current consolidated fiscal year, was included in the scope of the equity method due to its materiality. Meanwhile, Nagaoka Zosen Equipment (Dalian) Co., Ltd. was excluded from the scope of the equity method following the sale of the investment interest during the second quarter of the current consolidated fiscal year.」

「Osmoflo Water Desalination Equipment Trading LLC, in which the company completed its capital contribution during the first-quarter consolidated accounting period, and Aizu Eco Operation Co., Ltd., established during the same period, were included in the scope of consolidation due to their materiality.」

「大連達同機械工程技術有限公司, in which the Company completed an equity investment during the second-quarter consolidated accounting period, and 城南環境テクノロジー㈱ and ヒルサイドレイク環境テクノロジー㈱, which were established during the same consolidated accounting period, were included in the scope of consolidation because of their materiality.」

「HITZ(THAILAND)Co.,LTD. and 上海韋特庫斯貿易有限公司, which were established during the first-quarter consolidated accounting period, were included in the scope of consolidation because of their materiality.」

「During the consolidated fiscal year, the Company acquired shares in Osmoflo Holdings Pty Ltd and Osmoflo Holdings Singapore Pte Ltd (collectively, "Osmoflo"). Date of business combination: 14 February 2017; voting rights acquired: 70.0%.」

「At a board meeting held on 19 December 2016, the company resolved to acquire 70% of the issued shares of Osmoflo Holdings Pty Ltd and make it a subsidiary, and entered into a share transfer agreement with the company's shareholders on the same date.」

「By fully leveraging the company's business characteristics and strengths in its operations and organizational structure while further strengthening collaboration, the Company expects synergies including stronger capabilities to meet customer needs and improve productivity through an optimal product mix, as well as stronger overseas solutions businesses. It believes this will enable the Group to strengthen its manufacturing businesses, which are its point of origin, and expand its overseas businesses.」

「To strengthen earnings power and expand business scale, the Group has vigorously pursued key initiatives including promoting overseas local businesses, expanding recurring businesses, and commercializing and monetizing new products and businesses at an early stage.」