April 27, 2009 Corporate Planning Division Komatsu, Ltd.

Transcription

1 Business Results for FY28 Business Results for FY28 ended March 31, 29 and Tasks and Projection for FY29 ending March 31, 21 April 27, 29 Corporate Planning Division Komatsu, Ltd. 1

2 Outline of FY28 ended March 31, 29 Business Results for FY28 1. Sales and profits: Declined after six straight years of growth. Recorded structural reform expenses of 32.3 billion yen. Net sales 2,21.7 billion yen, down 9.9% Operating income billion yen, down 54.3% Operating income ratio 7.5%, down 7.3 points Net income 78.7 billion yen, down 62.3% 2. Review of two business segments - Construction, Mining and Utility Equipment: Demand in European markets began declining in the first quarter, while that in Japan and North America remained slack. Demand in China and other emerging economies began plunging as affected by the global financial crisis and drastic fall of commodity prices. As a result, sales of this segment decreased 14.9% from the previous year, and segment profit, 43.2%. - Industrial Machinery and Others: While sales of this segment advanced 39.4% from the previous year, mainly reflecting the addition of Komatsu NTC as a consolidated subsidiary, segment profit declined 35.4% due to a sharp drop in sales of presses and machine tools as affected by rapidly receding capital investment against the backdrop of economic recession. 3. Cash dividends Year-end cash dividends: 18 yen per share. Annual dividends: 4 yen per share including interim dividends of 22 yen per share. (To be proposed to the 14th ordinary general meeting of shareholders.) 2

3 Business Results for FY28 1. FY28 Fourth Quarter Results (Three Months ended March 31, 29) 3

4 Sales and Profit for the Fourth Quarter Business Results for FY28 % : Profit ratio [ ]:Sales after elimination of inter-segment transactions Billions of yen Jan.-Mar., 28 1USD=14yen 1EUR=158yen Jan.-Mar., 29 1USD=95yen 1EUR=123yen Increase (decrease) Net sales (234.9) (38.3)% Construction, Mining & Utility Equipment Industrial Machinery & Others [558.7] 56.6 [55.2] 63.8 [316.] 317. [62.9] 7.4 [(242.6)] (243.6) [7.7] 6.6 [(43.4)%] (43.4)% [14.%] 1.4% Elimination (1.4) (8.4) 2. - Segment profit (loss) 15.3% 94. (3.2)% (12.3) (16.4) (113.1)% Construction, Mining & Utility Equipment Industrial Machinery & Others 16.1% 7.5% (2.4)% (4.8)% (7.6) (3.4) (97.9) (8.1) (18.4)% (171.5)% Corporate & elimination (1.) (1.2) (.2) - Other operating income (expenses) (2.6) (35.9)* (33.2) - Operating income (loss) 14.9% 91.4 (12.7)% (48.2) (139.6) (152.8)% Other income (expenses) (3.9) (1.) Income (loss) from continuing operations before income taxes 87.4 (49.3) (136.7) (156.4)% Net income (loss) 57.2 (34.5) (91.7) (16.3)% * Including structural reform expenses of 32.3 billion yen. 4

5 Quarterly Sales and Operating Income Business Results for FY28 Billions of yen Exchange rates 1USD 1EUR Billions of yen Operating income Operating income ratio Quarterly sales FY7/1Q FY7/2Q FY7/3Q FY7/4Q FY8/1Q FY8/2Q FY8/3Q Last forecast Result FY7/1Q FY7/2Q FY7/3Q FY7/4Q FY8/1Q FY8/2Q FY8/3Q Last forecast Result 7/1Q 7/2Q 7/3Q 7/4Q 122yen 117yen 113yen 14yen 164yen 162yen 165yen 158yen Quarterly operating income /1Q 8/2Q 8/3Q 4Q Forecast 8/4Q 15yen 17yen 95yen 9yen 95yen 165yen 159yen 126yen 12yen 123yen Excluding special factors FY8/4Q FY8/4Q Industrial Machinery & Others Construction, Mining & Utility Equipment % Sales for 4Q/FY28 [ Differences from projection, etc.] Construction, Mining & Utility Equipment Forex : 9 95 yen/usd1 resulting in +4.3 bil yen (Down 3 bil yen in sales resulting from reduced inventories remained the same as projection.) Industrial Machinery & Others Volume difference: Delayed delivery of some large presses and delayed delivery/cancellations of small and medium-sized presses resulting in bil yen Operating income for 4Q/FY28 1. Main factors of the difference (-48.1 bil yen) from projection: (1) Segment profit Construction, Mining & Utility Equipment: Market environment, devaluation of inventories in response to reduced production, increased use of allowance: -8.4 bil yen Product and region mix: -8.2 bil yen Industrial Machinery & Others: Increased allowance for declined sales and doubtful receivables, etc.: -6.2 bil yen (2) Other operating income Addition of expenses such as for production reorganization in Japan and North America to planned structural reform expenses: bil yen 2. Extraordinary expenses: [Approx bil yen)] (1) Segment profit Temporary expenses above: -8.4 bil yen Loss cost resulting from reduced production: Approx. -5. bil yen Reduced production for inventory reduction: Approx. -9. bil yen (2) Other operating income Structural reform expenses: bil yen 5

6 Business Results for FY28 2. Results for FY28 ended March 31, 29 6

7 Sales and Profit for FY28 ended March 31, 29 Business Results for FY28 % : Profit ratio [ ]:Sales after elimination of inter-segment transactions Billions of yen FY27 1USD=114yen 1EUR=162yen FY28 1USD =11yen 1EUR=143yen Increase (decrease) Net sales 2,243. 2,21.7 (221.2) (9.9)% Construction, Mining & Utility Equipment Industrial Machinery & Others [2,48.7] 2,54.8 [194.3] [1,744.7] 1,749.3 [277.] 33.3 [(33.9)] (35.4) [82.6] 85.7 [(14.8)%] (14.9)% [42.6%] 39.4% Elimination (29.5) (31.) (1.5) - Segment profit 14.9% % (145.9) (43.6)% Construction, Mining & Utility Equipment Industrial Machinery & Others (137.4) (7.) (43.2)% (35.4)% Corporate & elimination (3.2) (4.6) (1.4) - Other operating income (expenses) (1.7) (36.7) (34.9) - Operating income 14.8% % (18.9) (54.3)% Other income (expenses) (1.6) (23.1) (12.5) - Income from continuing operations before income taxes 15.5% 9.2% (193.4) (6.)% Income from continuing operations (125.) (61.3)% Income from discontinued operations (4.9) - Net income (129.9) (62.3)% 1.3% 4.2% Cash dividends per share 42 yen 4 yen (2) yen 7

8 Consolidated Balance Sheets Business Results for FY28 Cash & deposits [a] Accounts receivable (Incl. long-term trade receivable) Inventories Tangible fixed assets Other assets Mar.31, 28 1USD=1yen 1EUR=158yen Mar.31, 29 1USD=98yen 1EUR=13yen Increase (decrease) (11.5) (136.4) (11.) 34.3 (11.3) Total assets 2,15.1 1,969. (136.) Accounts payable Interest-bearing debt [b] Other liabilities (172.7) (42.) Total liabilities 1, ,12.7 (67.) Minority interests [% of total assets] Shareholders equity [42.1%] Net D/E ratio [41.4%] Billions of yen [(.7)points] (72.1) Liabilities & shareholders equity 2,15.1 1,969. (136.) Interest-bearing debt, net [b-a]

9 Business Results for FY28 Construction, Mining & Utility Equipment : Sales (To Outside Customers) by Region Billions of yen FY27 FY28 Increase (decrease) Ratio Ratio Change Japan % % (6.8) (16.4)% North America % % (74.8) (23.2)% Latin America % % % Europe % % (156.7) (46.)% CIS % % % China % % (2.2) (1.2)% Asia & Oceania % % (19.) (5.8)% Middle East & Africa % % (19.9) (8.7)% Total 2,48.7 1% 1, % (33.9) (14.8)% 9

10 Business Results for FY28 Construction, Mining & Utility Equipment: Causes for Difference in Sales FY27 vs. FY28 Billions of yen Index: FY7 results = 1 [Positive factor] - Price difference (price hike effect) : +7.6 billion yen 2,5 2, 1,5 84 1, ,54.8 Price difference +7.6 Demand difference Inventory reduction -3. Exchange rate difference ,749.3 [Negative factors] - Demand difference : billion yen - Inventory reduction : - 3. billion yen - Exchange rate difference : billion yen [FY7] [FY8] (USD) 114 yen 11 yen (EUR) 162 yen 143 yen 1, FY26 FY27 FY28 Reduced sales of 35.4 billion yen Positive factor Negative factor 1

11 Business Results for FY28 Construction, Mining & Utility Equipment: Causes for Difference in Segment Profit FY27 vs. FY28 Billions of yen Index: FY7 results = 1 Price difference +7.6 Cost reduction, increased material prices & others Demand difference Inventory reduction & 57 production reduction -17. Fixed costs difference Exchange rate difference [Positive factor] - Price difference (Price hike effect) : +7.6 billion yen [Negative factor] - Cost reduction, increased material prices & others : billion yen - Demand difference : billion yen - Inventory reduction & production reduction : -17. billion yen - Fixed costs difference : billion yen - Exchange rate difference : billion yen % 15.5% 1.3% FY26 FY27 Segment profit ratio FY28 Reduced profit of billion yen Positive factor Negative factor 11

12 Business Results for FY28 Construction & Mining & Utility Equipment : Sales and Segment Profit by Region (Geographic origin) Billions of yen FY27 FY28 Increase (decrease) Net sales Segment profit Net sales Segment profit Net sales Segment profit Japan 1, (165.6) (126.4) Americas (5.1) (4.) Europe & CIS (158.8) (21.9) Others (42.1) (8.1) Total 2, , (416.8) (16.5) Elimination (582.5) (3.1) (471.1) Consolidated , (35.4) (137.4) 12

13 Industrial Machinery & Others : Sales and Segment Profit Business Results for FY28 Billions of yen Sales (To outside customers) FY26 FY27 FY28 Breakdown of sales and segment profit (FY27 v.s. FY28) Billions of yen % Segment profit % % FY26 FY27 FY28 Segment profit ratio : (Segment profit) / (Net sales before elimination) Billions of yen % Sales FY27 FY28 Increase (decrease) Segment profit FY27 FY28 Increase (decrease) Large presses & Komatsu Industries (1.6) (6.8) Komatsu NTC -Consolidated adjustment -Amortization of intangible assets Other industrial machinery businesses (Komatsu Machinery, Komatsu Engineering, KELK) (2.7) (2.7) (4.3) (2.8) Others (8.2) (.5) Elimination (23.3) (26.3) (3.) Total (7.) 13

14 Retail Finance Business Business Results for FY28 Consolidated finance subsidiaries (internal-use data) Billions 5 of yen 1. Assets Billions 5 of yen 2. Revenues Revenues Pretax income On balance Off balance End of March, 28 End of March, 29 (1USD) 1yen (1EUR) 158yen Others China Europe Japan North America On balance Off balance 98yen 13yen Others China Europe Japan North America FY27 FY28 (1USD) 114yen 11yen (1EUR) 162yen 143yen 14

15 Business Results for FY28 3. Projection for FY29 ending March 31, 21 15

16 1. Sales and profits Business Results for FY28 Outline of Projection for FY29 ending March 31, 21 Net sales 1,53. billion yen, down 24.3% Operating income 72. billion yen, down 52.6% Operating income ratio 4.7%, down 2.8 points Income before income taxes 62. billion yen, down 51.9% Net income 35. billion yen, down 55.6% 2. Outlook of two business segments - Construction, Mining & Utility Equipment: Global demand will remain sluggish except for China where we see signs of recovery thanks to the government s economic stimulus package. We are going to complete inventory reductions as soon as possible, cut down fixed costs and carry out structural reforms to improve productivity, but we project registering net sales of 1,36 billion yen, down 22.3% and segment profit of 89 billion yen, down 5.7%. - Industrial Machinery & Others: Capital investment particularly by the automobile manufacturing industry will remain slack for the time being. We are also working to reduce fixed costs and improve productivity, but we project registering sales of 19 billion yen, down 37.4% and segment profit of 1 billion yen, down 92.2%. 3. Cash dividends Annual dividends of 16 yen per share are projected. (Consolidated payout ratio should translate into 44.2% of net income.) FY28 FY29 Increase (decrease) Interim period 22 yen 8 yen* (14) yen End of year 18 yen* 8 yen* (1) yen Total 4 yen* 16 yen* (24) yen * Projected 16

17 Projection for FY29 ending March 31, 21 Business Results for FY28 % : Profit ratio [ ] : Sales after elimination of inter-segment transactions Billions of yen FY28 Results 1USD=11yen 1EUR=143yen FY29 Projection 1USD =95yen 1EUR=125yen Increase (decrease) Net sales 2,21.7 1,53. (491.7) (24.3)% Construction, Mining & Utility Equipment Industrial Machinery & Others [1,744.7] 1,749.3 [277.] 33.3 [1,357.] 1,36. [173.] 19. [(387.7)] (389.3) [(14.)] (113.3) [(22.2)%] (22.3)% [(37.5)%] (37.4)% Elimination (31.) (2.) Segment profit 9.3% % 86. (12.6) (54.4)% Construction, Mining & Utility Equipment Industrial Machinery & Others 1.3% 4.2% %.5% (91.4) (11.8) (5.7)% (92.2)% Corporate & elimination (4.6) (4.).6 - Other operating income (expenses) (36.7) (14.)* Operating income 7.5% % 72. (79.9) (52.6)% Other income (expenses) (23.1) (1.) Income before income taxes (66.7) (51.9)% Net income (43.7) (55.6)% Cash dividends per share 4 yen 16 yen (24)yen * Including structural reform expenses of 1. billion yen 17

18 Business Results for FY28 Construction, Mining & Utility Equipment : Sales by Region and Segment Profit Billions 2,5 of yen 2, 1,5 1, % 1, % FY26 FY27 FY28 FY29 Projection 117/USD 151/EUR +42.2% +37.6% +61.2% +85.3% +32.2% +24.2% 12.3% Sales by region (To outside customers) 2, /USD 162/EUR 14.8% 8.7% 5.8% 1.2% +3.4% +14.2% 46.% 23.2% 16.4% 1, /USD 143/EUR 22.2% 34.9% 29.% +11.6% 32.7% 25.5% 34.8% 19.3% 16.1% 1, /USD 125/EUR Year-on-year growth Middle East & Africa Asia & Oceania China CIS Latin America Europe North America Japan Billions of yen China 1% CIS 5% Asia & Oceania 16% Middle East & Africa 1% China 15% CIS 4% % 1 1.3% 6.5% FY27 FY28 FY29 Projection Segment profit ratio : (Segment profit) / (Net sales before elimination) Middle East & Africa 12% Asia & Oceania 18% FY28 Latin America 12% Breakdown (%) Japan 18% North America 14% Europe 11% Segment profit FY29 Projection Japan 19% Europe Latin 9% America 12% % North America 15% 18

19 Business Results for FY28 Construction, Mining & Utility Equipment: Causes for Difference in Segment Profit Billions of yen Selling price, production cost, material price and others Index: FY28 results = 1 Fixed cost +22. Demand difference -95. Inventory reduction -9. Exchange rate difference [Positive factors] -Selling price, production cost, material price and others : billion yen -Fixed cost : +22. billion yen [Negative factors] -Demand difference : -95. billion yen -Inventory reduction : -9. billion yen -Exchange rate difference : -32. billion yen % 1.3% 6.5% FY27 FY28 Segment profit ratio FY29 Projection Reduced profit of 91.4 billion yen Positive factor Negative factor 19

20 Industrial Machinery & Others : Sales and Segment Profit Business Results for FY28 Billions of yen Sales (To outside customers) FY27 FY28 FY29 Projection Breakdown of sales (FY28 vs. FY29 Projection) Billions of yen % % 1..5% FY27 FY28 FY29 Projection Sales Segment profit Segment profit ratio : (Segment profit) / (Net sales before elimination) FY28 FY29 Projection Increase (decrease) Large presses & Komatsu Industries (37.3) Komatsu NTC (42.7) Other industrial machinery business (12.6) Total of Industrial machinery business (92.7) Others (2.7) Elimination (26.3) (17.) 9.3 Total (14.) Billions of yen %

21 Retail Finance Business Business Results for FY28 Consolidated finance subsidiaries (internal-use data) Billions of yen Assets 2. Revenues Billions of yen5 Revenues Pretax income 4 3 Others China Others China 3 2 On balance Europe Japan On balance Europe Japan 2 1 Off balance FY28 (1USD) 98yen (1EUR) 13yen North America Off balance FY29 Projection 95yen 125yen North America 1 FY28 FY29 Projection (1USD) 11yen 95yen (1EUR) 143yen 125yen 21

22 Capital Expenditures, Depreciation and R&D Expenses Business Results for FY28 Billions of yen Investment in production and other facilities,* and depreciation Billions of yen R&D expenses % % % % % % FY27 FY28 FY29 Projection Industrial Machinery & Others Construction, Mining & Utility Equipment Depreciation FY27 FY28 FY29 Projection Industrial Machinery & Others Construction, Mining & Utility Equipment Percnt of net sales -2% * Excluding investment in rental assets 22

23 Business Results for FY28 4. Changes in the Business Environment 23

24 Business Results for FY28 Changes (1): Demand for Construction and Mining Equipment Units Demand by region and year-on-year rate of growth : 7 major products Rate of growth 6, Others 3% 22% China 5, 16% Europe North America 2% 4, 16% 13% 13% Japan Rate of growth 1% 3, 4% % 2, -1% 1, -21% -2% -26% FY2 FY3 FY4 FY5 FY6 FY7 FY8 FY9e -3% 24

25 Changes (2): Mining Equipment Business Results for FY28 Units 6, 5, 4, 3, 2, 1, +67% Demand by region +52% +12% +3% +19% -21% FY3 FY4 FY5 FY6 FY7 FY8 FY9e Others Africa Australia Southeast Asia Latin America North America [Applicable products] -Dump trucks: 75t (HD785) and larger -Bulldozers: 525HP (D375) and larger -Hydraulic excavators: 15t (PC16) and larger -Wheel loaders: 5HP (WA7) and larger -Motor graders: 28HP (GD825) and larger Millions of USD 5, 4, 3, 2, 1, Sales of mining equipment (Internal-use data) * Incl. sales of parts and service FY3 FY4 FY5 FY6 FY7 FY8 FY9e Backlog orders * Finished products only. Excl. parts and service Billions of yen 6 Komatsu Ltd. (non-consolidated) (mining equipment related) Millions of USD 1, Komatsu America Corp. (Mining Div.) Millions of EUR 18 Komatsu Mining Germany GmbH '7.12 '8.3 '8.6 '8.9 '8.12 '9.3 '8.3 '8.6 '8.9 '8.12 '9.3 '8.3 '8.6 '8.9 '8.12 '9.3 25

26 Changes (3): Utility Equipment Business Results for FY28 1. Compact construction equipment 2. Forklift trucks Units 4, 3, 2, Demand +14% +9% +1% Others Europe North America Japan Units 7, 6, Others China Europe North America Japan +21% 5, +1% -25% +17% 4, -27% 3, Demand +12% Product categories 1, 4 & 5 +15% -16% -3% 1, 2, 1, FY3 FY4 FY5 FY6 FY7 FY8 FY9e FY3 FY4 FY5 FY6 FY7 FY8 FY9e Billions of yen 15 Sales (Internal-use data) Billions of yen 15 Sales (Internal-use data) FY3 FY4 FY5 FY6 FY7 FY8 FY9e FY3 FY4 FY5 FY6 FY7 FY8 FY9e 26

27 Changes (3): Industrial Machinery Business Results for FY28 Bil yen/mo Orders received for press and sheet metal machines (Major Japanese makers) Sheet metal machines Presses Rate of growth 6% 4% 2% Bil yen/mo Orders received for machine tools (Major Japanese makers) Export Japan Rate of growth 6% 4% 2% % -2% -4% 2 % 3-6% -8% 16-2% '8/1Q '8/2Q '8/3Q '8/1 '8/11 '8/12 '9/1 '9/2-1% '8/1Q '8/2Q '8/3Q '8/1 '8/11 '8/12 '9/1 '9/2 '9/3-4% -6% -8% -1% -12% Bil yen /mo Orders received for semiconductor manufacturing equipment (Major Japanese makers) '8/1Q '8/2Q '8/3Q '8/1 Orders received Rate of growth '8/11 '8/12 '9/1 '9/2 1% 8% 6% 4% 2% % -2% -4% -6% -8% -1% -12% 27

28 Business Results for FY28 5. Mid-Range Management Plan: Progress Made and Tasks Ahead 28

29 Business Results for FY28 Global Teamwork for 15 Mid-Range Management Plan in Figures Mid-range management plan (FY7-9): target figures Target items FY6 FY7 FY8 1 st Half FY8 FY9 Projection Target figures for FY9 1 Operating income ratio 12.9% 14.8% 13.2% 7.5% 4.7% 15% or above 2 ROE 23.5% 25.1% 21.8% 9.3% 4.3% To maintain 2% level. 3 Net debt-to-equity ratio or below Excl. borrowings of finance subsidiaries Consolidated payout ratio* 2.1% 2.5% - 5.% 44.2% 2% or above <Assumptions of mid-range management plan> Operating income ratio Items of assumption FY6 FY7 FY8 1 st Half * Based on income from continuing operations FY8 FY9 Projection Guidelines for FY9 1 Net sales (Billion yen) 1, ,243. 1, ,21.7 1,53. 2,4. (+/- 1.) 2 FOREX JPY/USD <7 major products and operating income ratio> JPY/EUR (-:Mid-range management plan, :Results) Demand (units) /3/27 (\/$) 26/6/27 26/9/27 26/12/27 27/3/27 27/6/27 27/9/27 27/12/27 28/3/27 28/6/27 <Foreign exchange rates> 28/9/27 28/12/ /3/27 (\/ ) 26/6/27 26/9/27 26/12/27 27/3/27 27/6/27 27/9/27 27/12/27 28/3/27 28/6/27 28/9/27 28/12/27 29

30 Business Results for FY28 Activities of Importance (1): Development of DANTOTSU Products 1. Launchings and expanding sales of hybrid models 1) Launching of PC2 Hybrid hydraulic excavators in Japan (from June,8) -3 units delivered to customers in Tokyo Metropolitan Area (Max. over 3, hours of use already) -Fuel consumption reduced : 25% (Average) -- 35% (Best) Reduction of fuel cost : Approx. 1.1 million yen on average per year (calculated at 95 yen per liter of diesel fuel) Full-scale sales begun in April 29 2) Commercial production to start in October 29 (1 units/month) -Sales target in FY9: 7 units (incl. 5 units in China and 18 units in Japan) -Sales target in FY21: 3, units PC2-8 Hybrid hydraulic excavator 2. Expanding introduction of Autonomous Haulage System 1) Two already in operation Trouble-free, stable operation -CODELCO s Gaby Mine: 11 dump trucks -RIO TINTO s West Angelas Mine: 5 dump trucks -Improved productivity -Reduced manpower: operators per one dump truck (Providing big merits by reducing the number of operators in addition to their wages) 2) Introducing AHS to more customers steadily into the future (Brisk inquiries) 93E unmanned dump truck in operation at RIO TINTO s West Angelas Mine 3

31 Business Results for FY28 Activities of Importance (2): Further Enhancement of Market Position in Greater Asia <Demand and market share of 7 major products in Greater Asia> 3% Demand (units) Market share worldwide Market share in Greater Asia Thousand 2 2% 1 1. Expansion of local production 1% FY3 FY4 FY5 FY6 FY7 FY8 FY9e Komatsu India No.2 shop, Bangkok Komatsu No. 2 shop, Komatsu Shantui Komatsu Undercarriage China Komatsu Manufacturing Rus. (Russia) Komatsu (Changzhou) relocating for expansion 2. Market development with new models <No. of hydraulic excavator models produced in China> 27: 13 models 28: 15 models Plan for 2 models 3. Distributor training and reinforcement of product support operation Strengthening service capability 1. Distributors product support capability evaluated Training expanded for service engineers (Instructors dispatched from Japan and trainings of engineers offered in Japan) 2. Product support centers established (India, Philippines, Vietnam and China) IT applications 3. Zero Inventory campaign for distributors (China, India and Thailand completed) 4. Project launched to introduce the distributor resource management system in emerging economies 1. Building the first Techno Center in China (machine demonstration and training facilities) 2. Training service engineers at the Komatsu H.R.D. Center (opened Nov. 28) in Manila 3. Expanding the regions for KOMTRAX application (Indonesia and Malaysia) 31

32 Business Results for FY28 Activities of Importance (3): Business Expansion in the Entire Value Chain Parts and service business Billions of yen 3 <Sales of spare parts> 2 1 FY5 FY6 FY7 FY8 FY9e 1) Expanding sales by increasing production capacity - Komatsu Undercarriage China began shipment (4Q, FY8) - Komatsu Undercarriage Indonesia built additional lines for undercarriage for bulldozers (4Q, FY8) 2) Sharpening cost competitiveness of Reman business by concentrating remanufacturing in Indonesia and Chile 3) Expanding R&M business - Combined revenues of 3 consolidated distributors FY7: US$21 million FY8: US$3 million - Contract ratio in Australia (units) FY7: 8% FY8: 31% 35 Millions 3 of USD PT Komatsu Undercarriage Indonesia <Combined revenues from R&M Contracts: 3 consolidated distributors> '4 '5 '6 '7 '8 '9e 32

33 Business Results for FY28 Activities of Importance (4): Establishment of Flexible Manufacturing Operations 1. Reducing fixed costs by reorganizing production <Reorganization of plants> N. America 1) Candiac Manufacturing Operation Newberry Manufacturing Operation Europe Japan 2) Komatsu Forklift USA s Atlanta Plant Newberry Manufacturing Operation 3) Komatsu Forest, LLC (USA) Chattanooga Manufacturing Operation Narrowing down the models of production to engage in fixed volume production 1) Komatsu Utility: Kawagoe Plant Tochigi Plant 2) Mooka Plant Ibaraki Plant 3) Komatsu Plant Kanazawa Plant <Reduction of fixed costs combined in Japan, North America and Europe by reorganizing production> FY28 FY29 Plan FY21 Plan 2. Improving productivity of Japanese plants Target: To improve productivity by 3% by the end of FY21. Awazu Osaka Oyama Assembly line for motor graders Integrating into assembly lines for wheel loaders (Total: 3 2 lines) Consolidating machines for gears and heat treatment furnaces Consolidating housings and end covers for hydraulic units 33

34 Business Results for FY28 Activities of Importance (5): Expansion of Utility Equipment Business 1. Development of next-generation hybrid electric forklift models Sealed batteries Mounting them on standard electric models to reduce production costs Development of controller for power charge Conventional battery model Refilling of water required (2min/wk) Operation: 6 hrs (Standard charging: 1 hrs) Hybrid electric models Reduced fuel consumption and CO2 emissions (2% or more) Sealed batteries Reduced maintenance fees thanks to no refilling of water Longer hours of use (max. 1 plus hrs) thanks to rapid charging* * Standard charging: 8 hrs. whereas rapid charging: 1 hr Next-generation hybrid models 1) Boost battery models 2) Lithium-ion battery models Higher power output Longer operating hours Better power regeneration Hybrid models powered by PM*1 motor Instantaneous power on par with internal combustion models *1 PM: Permanent magnetic 2. Development of HST*2-driven Models Reducing fuel consumption by lowering power output of the engine Use of Komatsu-made components *2 HST: Hydrostatic transmission フロント Front アクスル axle コントローラ Controller モータ Motor ポンプ Pump Engine エンジン HST 34

35 トルク Business Results for FY28 Activities of Importance (6): Reinforcement of Industrial Machinery Business 1. Development of next-generation AC servo presses 2. Expansion of wire saw model range Large Small First generation (~28) Key technologies 4-spindle independent drive and control 偏 心 荷 重 に よる 遅 れをリ カバー サーボモータ Slide drive by combining reduction gears and whit hose mechanism -Die height /load compensation control -Lower dead point horizontal positioning control -Hybrid mechanism (link + Servo) 異 なる 偏 心 荷 重 サーボモータ エンコーダ エンコーダ Customers merits -High-precision metal forming -Vertical startup of production by using digital data (Reduction of trial pressing) -Compact size -Improved maintainability -Lower noise -Reduced lubricant oil -Power consumption: down 3% -Productivity: up 2% thanks to free motion mechanism -Variance in quality of finished work: 1/3 or under Next generation (29~) Key technologies Reduction gearsintegrated motor (Built-in DD motor) Reduction Gears DD Motor Drive mechanism with built-in slide Customers merits -Further enhancement of merits on the left -Press height; down 3% -Total gaps caused by uneven movement of parts: 1/2 -Elastic amount of machine itself: 1/2 Improved die life ( 億 円 ) Small Large Other Conventional 従 来 機 Medium 中 型 Sales targets by model Conventional 従 来 機 Small 小 型 Medium 中 型 Large 大 型 Mediumsized MWM442DM- (For solar cells/remodeling) PV8S (For solar cells/remodeling) Conventional 従 来 機 Small 小 型 Medium 中 型 Large 大 型 FY29 年 FY21e 年 FY211e 年 MWM85 (For wafers for next-generation solar cells/new development) PV12S (For wafers for next-generation solar cells/new development) MWM455NQ (For semiconductors/new development) 35

36 Business Results for FY28 Activities of Importance (7): Reduction of Fixed Costs Net sales in billion yen 3, 23% 1,143.2 Consolidated fixed costs and consolidated sales 2% 1, % Fixed costs / sales ratio Net Sales Fixed Costs 1, % 1, % 2, % 2, % 1,53. Down 25 billion yen Fixed costs in billion yen 4 3 Ongoing efforts Japan - Reorganization of plants - Integration of sales companies of construction equipment - Integration of rental companies of construction equipment - Integration of business bases of utility equipment - Integration of sales companies of forklift trucks North America - Reorganization of plants - Integration of sales companies of forklift trucks Europe - Promotion of fixed volume production at plants - Discontinuation of Reman centers FY3 FY4 FY5 FY6 FY7 FY8 FY9e 2 36

37 Business Results for FY28 <Appendix> Quarterly Sales and Segment Profit, Etc. 37

38 Quarterly Sales by Business Segment Business Results for FY28 Billions of yen FY26 1,893.3 bil yen Elimination Industrial Machinery & Others Construction, Mining & Utility Equipment FY27 2,243. bil yen FY28 2,21.7 bil yen Industrial Machinery & Others Construction, Mining & Utility Equipment -1 Exchange rates 1USD 1EUR Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY26 FY27 FY28 114yen 117yen 118yen 119yen 145yen 149yen 153yen 157yen 122yen 117yen 113yen 14yen 164yen 162yen 165yen 158yen 15yen 17yen 95yen 95yen 165yen 159yen 126yen 123yen *As the Construction, Mining & Utility Equipment segment includes the forklift truck business of Komatsu Utility Co., Ltd. as well as Komatsu Logistics Corp. starting in FY28, the figures for FY26 and FY27 are reclassified accordingly. 38

39 Business Results for FY28 Quarterly Sales (To Outside Customers) by Region: Construction, Mining & Utility Equipment Billions of yen Middle East & Africa Asia & Oceania China Europe & CIS Latin America North America Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY26 FY27 FY28 Japan Exchange rates 1USD 114yen 117yen 118yen 119yen 122yen 117yen 113yen 14yen 15yen 17yen 95yen 95yen 1EUR 145yen 149yen 153yen 157yen 164yen 162yen 165yen 158yen 165yen 159yen 126yen 123yen *As the Construction, Mining & Utility Equipment segment includes the forklift truck business of Komatsu Utility Co., Ltd. as well as Komatsu Logistics Corp. starting in FY28, the figures for FY26 and FY27 are reclassified accordingly. 39

40 Quarterly Segment Profit and Ratio: Total Business Results for FY28 Billions of yen Exchange rates bil yen [13.2%] bil yen [14.9%] Segment profit Segment profit ratio Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q bil yen [9.3%] FY26 FY27 FY % USD 114yen 117yen 118yen 119yen 122yen 117yen 113yen 14yen 15yen 17yen 95yen 95yen 1EUR 145yen 149yen 153yen 157yen 164yen 162yen 165yen 158yen 165yen 159yen 126yen 123yen *As the Construction, Mining & Utility Equipment segment includes the forklift truck business of Komatsu Utility Co., Ltd. as well as Komatsu Logistics Corp. starting in FY28, the figures for FY26 and FY27 are reclassified accordingly. 4

41 Business Results for FY28 Quarterly Segment Profit and Ratio: Construction, Mining & Utility Equipment Billions of yen bil yen [13.5%] bil yen [15.5%] 18.4 bil yen [1.3%] Segment profit Segment profit ratio % Exchange rates 1USD 1EUR 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY26 FY27 FY28 114yen 117yen 118yen 119yen 145yen 149yen 153yen 157yen 122yen 117yen 113yen 14yen 164yen 162yen 165yen 158yen yen 17yen 95yen 95yen 165yen 159yen 126yen 123yen *As the Construction, Mining & Utility Equipment segment includes the forklift truck business of Komatsu Utility Co., Ltd. as well as Komatsu Logistics Corp. starting in FY28, the figures for FY26 and FY27 are reclassified accordingly

42 Quarterly Segment Profit and Ratio: Industrial Machinery & Others Business Results for FY28 Billions of yen bil yen [1.%] Segment profit Segment profit ratio bil yen [9.2%] bil yen [4.2%] % Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY26 FY27 FY28 *As the Construction, Mining & Utility Equipment segment includes the forklift truck business of Komatsu Utility Co., Ltd. as well as Komatsu Logistics Corp. starting in FY28, the figures for FY26 and FY27 are reclassified accordingly. 42

43 Business Results for FY28 Cautionary Statement This presentation sheets contain forward-looking statements that reflect management s views and assumptions in the light of information currently available with respect to certain future events, including expected financial position, operating results and business strategies. These statements can be identified by the use of terms such as will, believes, should, projects, plans, expects, and similar terms and expressions that identify future events or expectations. Actual results may differ materially from those projected, and the events and results of such forward-looking assumptions cannot be assured. Any forward-looking statements speak only as of the date of this presentation sheets, and Komatsu assumes no duty to update such statements. Factors that may cause actual results to differ materially from those predicted by such forward-looking statements include, but are not limited to, unanticipated changes in demand for the Company s principal products, owing to changes in the economic conditions in the Company s principal markets; changes in exchange rates or the impact of increased competition; unanticipated costs or delays encountered in achieving the Company s objectives with respect to globalized product sourcing and new information technology tools; uncertainties as to the results of the Company s research and development efforts and its ability to access and protect certain intellectual property rights; the impact of regulatory changes and accounting principles and practices; and the introduction, success and timing of business initiatives and strategies. Komatsu-made demining machine and a school which has been rebuilt as part of the community redevelopment project in which Komatsu is involved CORPORATE PLANNING, KOMATSU LTD. TEL: FAX: ir@komatsu.co.jp 43