1 Business Results for FY215 (April 1, 215-March 31, 216) Tetsuji Ohashi Mikio Fujitsuka Yasuhiro Inagaki April 27, 216 Komatsu Ltd. Participants President and CEO Executive Vice President and CFO Senior Executive Officer General Manager, Business Coordination Department
Contents 2 Ⅰ. Highlights of Business Results of FY215 <PP3-14> PP4-6 PP7-8 P9 P1 P11 PP12-14 : Highlights, Segment Sales and Profit of FY215 : Construction, Mining & Utility Equipment: Results of FY215 : Retail Finance Business : Industrial Machinery & Others: Results of FY215 : Consolidated Balance Sheets : Review of Previous Mid-range Management Plan Ⅱ. Outlook of FY216 Business Results <PP15-31> PP16-17 PP18-19 P2 P21 PP22-27 PP28-29 P3 P31 : Projection for FY215 [Highlights, Segment Sales and Profit ] : Construction and Mining Equipment: Outlook of FY216 : Retail Finance: Outlook of FY216 : Industrial Machinery & Others: Outlook of FY216 : Construction and Mining Equipment: Demand and Outlook for Seven Major Products : Construction and Mining Equipment: Mining Equipment : Construction and Mining Equipment: Sales of Part : Projection of Capital Expenditures, Depreciation, R&D Expenses and Fixed Costs Ⅲ. Mid-Range Management Plan (FY216-18) <PP32-4> Appendix <PP42-5> PP43-45 PP46-47 PP48-5 : Quarterly Results : Book-to-Bill Ratio [Orders Received / Sales (6 Months)] : Results for Fourth Quarter (January March, 216) of FY215
Ⅰ. Highlights of Business Results of FY215 3
Highlights of FY215 4 Consolidated net sales decreased by 6.3% from FY214, to JPY1,854.9 billion. Operating income declined by 13.8% from FY214, to JPY28.5 billion. Operating income ratio was 11.2%, down 1. point from FY214. Net income declined by 1.8% from FY214, to JPY137.4 billion. FY214 results 19.7/USD 139.6/EUR 17.7/RMB FY215 (Projection) 115/USD 127/EUR 18.3/RMB FY215 results 12.8/USD 132.4/EUR 19./RMB Increase (decrease) Changes % Change Net sales 1,978.6 1,88. 1,854.9 (123.7) (6.3)% Segment profit 24.9 225. 22. (38.9) (16.2)% Other operating income (expenses) 1. (4.) 6.5 +5.4 - Operating income 242. 221. 28.5 (33.4) (13.8)% Profit ratio 12.2% 11.8% 11.2% (1.)pts. - Other income (expenses) (5.9) (7.) (3.6) +2.2 - Net income before income taxes 236. 214. 24.8 (31.1) (13.2)% Net income * 154. 138. 137.4 (16.5) (1.8)% ROE 1.6% 9.% 9.% (1.6)pts. - Net D/E ratio.32.27.23 (.9)pts. - Excl. consolidated retail finance subsidiaries (.) (.3) (.9) (.9)pts. - Consolidated retail finance subsidiaries 3.2 2.88 3.4 +.2pts - Cash dividends per share 58yen 58yen 58yen +/- yen Consolidated payout ratio 35.8% 39.6% 39.8% * Upon adoption of ASC 81, "Net income" is equivalent to "Net income attributable to Komatsu Ltd."
Segment Sales and Profit of FY215 5 Construction, Mining & Utility Equipment: Segment sales declined by 6.9% from FY214, to JPY1,641. billion. Segment profit dropped 19.% to JPY184.1 billion. Segment profit ratio was 11.2%, down 1.7 points. Industrial Machinery & Others: Segment sales decreased.6% to JPY22.1 billion. Segment profit advanced 19.2% to JPY19.3 billion. % : Profit ratio [ ]: Sales after elimination of inter-segment transactions FY214 results FY215 (Projection) FY215 results Increase (decrease) Changes % Change Net sales 1,978.6 1,88. 1,854.9 (123.7) (6.3)% Construction, mining & utility equipment Industrial machinery & others [1,761.3] 1,763.4 [217.2] 221.5 [1,668.] 1,67. [212.] 215. [1,638.4] 1,641. [216.5] 22.1 [(122.9)] (122.3) [(.7)] (1.3) [(7.)%] (6.9)% [(.3)%] (.6)% Elimination (6.2) (5.) (6.2) +. - Segment profit 12.2% 24.9 12.% 225. 1.9% 22. (38.9) (16.2)% Construction, mining & utility equipment Industrial machinery & others 12.9% 7.3% 227.2 16.2 12.6% 8.4% Corporate & elimination (2.5) (3.) (1.4) +1. - 21. 18. 11.2% 8.8% 184.1 19.3 (43.1) +3.1 (19.)% +19.2% Review of two segments Construction, Mining and Utility Equipment While we steadfastly captured demand for construction equipment in North America, both sales and profit declined from FY214, as affected by declining sales of mining equipment against the backdrop of slack demand as well as drastically reduced demand in China and other emerging countries. Industrial Machinery and Others While GIGAPHOTON INC. expanded sales, supported by stable machine utilization of the semiconductor industry, total sales declined due to reduced sales of press and other machines. Segment profit improved.
Quarterly Sales and Operating Income 6 6 5 4 Industrial Machinery & Others Construction, Mining & Utility Equipment Elimination 469.9 46.9 43. 54.1 419.7 53.4 534.4 65.6 455.1 469.9 464.3 4.3 59.2 45.3 Quarterly sales 564.1 64.2 482.3 494. 46.2 43.3 59. 53.5 542. 65.6 484.4 446.1 446.3 478. 53.6 65.7 44.7 56. 3 2 429.7 49.3 368.4 471.9 416.6 413.4 42.7 51.4 418.5 425.1 442. 477.7 42.7 391.4 425.5 421.3 1 /USD Exchange rates /EUR /RMB 12 1 8 6 4 2-2.9-2.5-2.1-3.2-1.8-2.6-1.6-1.5-1.6-1.8-1.4-1.2-1.3-1.1-1.1-2.6 FY12/1Q FY13/1Q FY14/1Q FY15/1Q 12/1Q 12/ 12/ 12/ 8.6 78.7 8.1 9.7 14.6 98.3 13.5 12.1 12.8 12.4 12.8 14.6 11.9% 12.1% 55.7 55.5 Operating profit Operating profit ratio 9.3% 39.2 61.1 13/1Q 13/ 13/ 13/ 97.3 98.6 99.7 12.7 126.4 129.9 135.1 139.9 15.8 16.1 16.3 16.9 11.4% 11.5% 12.% 12.2% 52.4 56.5 56.6 Quarterly operating income 13.3% 13.8% 74.8 14/1Q 14/ 14/ 14/ 12.5 12.8 114.1 119.2 14.9 137.7 142.8 136.9 16.4 16.6 18.5 19. 12.9% 63.4 62.1 11.4% 11.1% 11.1% 11.% 56.2 6.1 15/1Q 15/ 15/ 15/ 121.3 122.6 121.2 118. 133. 136.2 132.3 128. 19.6 19.5 19. 17.9 49.7 49.3 11.6% 11.1% 55.6 53.9 FY12/1Q FY13/1Q FY14/1Q FY15/1Q
Construction, Mining & Utility Equipment: Sales by Region (To Outside Customers) of FY215 7 Sales to outside customers declined by 7.% from FY214, to JPY1,638.4 billion. While sales advanced in North America, these dropped drastically in Strategic Markets, such as Latin America, China and Africa. As a result, the share of Traditional Markets increased to 52% of total. Vs. FY214 FY214 1,761.3 FY215 1,638.4 (2.6) [(6.3)%] +74.5 [+22.9%] (6.6) [(4.5)%] (5.6) [(18.8)%] (6.5) [(12.1)%] (35.5) [(32.3)%] Plus Minus (21.5) [(1.2)%] (24.4) [(17.8)%] (2.1) [(3.5)%] (29.3) [(26.2)%] (122.9) [(7.)%] 1,8 1,6 1,4 1,2 1, 8 1,761.3 Africa 6% Middle East 4% 5% Middle East Oceania 4% 8% Oceania 7% Asia 12% Asia 12% China 6% CIS 3% Latin America 15% *1 Europe 8% Strategic Markets 54% 1,638.4 Africa China 4% CIS 3% Latin America 13% *1 Europe 9% Strategic Markets 48% Billions of yen Japan North America *1 Europe Latin America *1 CIS China Asia Oceania Middle East Africa Total FY214 33.5 325.8 148.2 27.1 54.3 11.2 212.3 137. 6.8 111.7 1,761.3 FY215 39.9 4.3 141.6 219.4 47.7 74.6 19.7 112.6 58.6 82.4 1,638.4 Traditional Markets Strategic Markets *1: Due to the acquisition of a distributor in Mexico, a part of sales in Mexico was reclassified from North America to Latin America, staring in FY215. <Corresponding sales of FY214 were also reclassified accordingly. > 6 4 2 North America 19% *1 Japan 19% FY214 Traditional Markets 46% North America 24% *1 Japan 19% FY215 Traditional Markets 52%
Construction, Mining & Utility Equipment: Causes of Difference in Sales and Segment Profit of FY215 8 Sales declined by JPY122.3 billion from FY214, affected by a sharp drop in the volume of sales in Strategic Markets, such as Latin America, China and Africa, which more than offset the effects of the Japanese yen s depreciation. Segment profit also declined by JPY43.1 billion, in spite of reduced fixed costs in addition to the effects of the Japanese yen s depreciation. Segment profit ratio was 11.2%, down 1.7 points. Billions of yen 1,8 1,6 1,4 1,2 1,763.4 Volume difference (145.7) Sales FY214 vs. FY215 Selling price (3.) Foreign exchange rates +26.3 1,641. Billions of yen 25 2 15 227.2 Volume difference & others (75.) Segment profit FY214 vs. FY215 Fixed costs +11.9 Selling price (3.) Foreign exchange rates +23. 184.1 (122.3) billion yen 1 (43.1) billion yen 1, 8 FY214 Positive factors Negative factor FY215 5 FY214 Positive factors Negative factor FY215 19.7/USD 139.6/EUR 17.7/RMB 12.8/USD 132.4/EUR 19./RMB 12.9% Segment profit ratio 11.2%
Retail Finance Business 9 While assets increased with additional contracts in North America, total assets declined from the previous fiscal year-end, affected by the effects of foreign exchanges and reduced new contracts in China and Chile. Segment profit declined mainly affected by a decline in assets in China. 8 7 6 Assets Mar 31, 215 vs. Mar 31, 216 681.5 651.5 7 6 5 Revenues FY214 vs. FY215 53.5 53.9 Sales Segment profit 5 4 3 2 1 North America Others Oceania China Europe Japan Mar. 31, 215 12.2/USD 13.3/EUR 19.4/RMB North America Others Oceania China Europe Japan Mar. 31, 216 112.7/USD 127.7/EUR 17.4/RMB Mar. 31, 215 Mar. 31, 216 Changes Interest-bearing debt 498.8 483.5 (15.3) Interest-bearing debt, net 487.7 476.6 (11.1) 4 3 2 1 FY214 19.7/USD 139.6/EUR 17.7/RMB 14.7 13.3 FY215 12.8/USD 132.4/EUR 19./RMB FY214 FY215 Changes ROA 2.4% 2.% (.4)% Net D/E ratio 3.2 3.4 +.2pts.
Industrial Machinery & Others: Sales and Segment Profit of FY215 1 While GIGAPHOTON INC. expanded sales, supported by stable machine utilization of the semiconductor industry, sales of press and other machines declined. As a result, segment sales decreased by.6% from FY214, to JPY22.1 billion. Segment profit ratio was 8.8%. 25 2 15 1 5 Sales 29.1 221.5 22.1 FY213 FY214 FY215 3 25 2 15 1 5 1. % 2. Segment profit :Segment profit ratio % 7.3 % 8.8 19.3 16.2 FY213 FY214 FY215 (%) 1 Breakdown of sales Komatsu Industries Corp., etc. [total of press and sheet-metal machines] FY213 FY214 FY215 Increase (decrease) Changes % change 54.5 64. 58. (5.9) (9.2)% Komatsu NTC Ltd. [represented by wire saws] 73.5 [5.8] 73.6 [7.8] 71. [6.9] (2.6) [(.8)] (3.6)% [(11.3)%] Others [repesented by Gigaphoton ] [represented by Komatsu House] 81.1 [24.] [16.4] 83.8 [29.2] [16.3] 91. [34.] [16.1] +7.1 [+4.8] [(.2)] +8.6% [+16.7%] [(1.5)%] Total 29.1 221.5 22.1 (1.3) (.6)%
Consolidated Balance Sheets 11 Total assets declined by JPY183.7 billion from the previous fiscal year-end, mainly affected by foreign exchanges and reduced inventories. Komatsu shareholders equity ratio increased by 3.4 points to 58.%. Net debt-to-equity ratio as.23. :Net debt-to-equity ratio Mar. 31, 215 Mar. 31, 216 12.2/USD 13.3/EUR 19.4/RMB 112.7/USD 127.7/EUR 17.4/RMB Increase (decrease) Cash & deposits (incl. time deposits) [a] 17.3 18.4 +1.1 Accounts receivable (incl. long-term trade receivables) 9.2 875.3 (24.9) <Excl. those of consolidated retail finance subsidiaries> <398.1> <366.1> <(32.)> Inventories 622.8 539.6 (83.2) Tangible fixed assets 743.9 697.7 (46.1) Other assets 424. 393.5 (3.5) Total assets 2,798.4 2,614.6 (183.7) Accounts payable 225. 25.4 (19.6) Interest-bearing debt [b] 589.1 457.5 (131.5) <Excl. those of consolidated retail finance subsidiaries> <9.2> <(25.9)> <(116.2)> Other liabilities 385.6 363.9 (21.7) Total liabilities 1,199.9 1,26.8 (173.) [Shareholders equity ratio] [54.6%] [58.%] [+3.4pts.] Komatsu Ltd. shareholders equity 1,528.9 1,517.4 (11.5) Noncontrolling interests 69.5 7.3 +.8 Liabilities & Equity 2,798.4 2,614.6 (183.7) Interest-bearing debt, net [b-a] 481.8 349. (132.7) Net D/E ratio.32.23 excl. cash and interest-bearing debt of retail finance..9 retail finance 3.2 3.4
Review of Previous Mid-range Management Plan: Global Demand 12 - Global demand has entered an adjustment phase centering on emerging countries, resulting in a big gap from the plan which assumed gradual recovery. - Assumptions for growth in the long range remain unchanged. [Assumptions for demand for 7 major products] Growth in North America. Bottoming out in FY212 in China. Stable growth in Latin America and CIS. Accelerating growth in Strategic Markets from FY215. 45, Units YoY rate of growth 15% 45% 5% 4% 2% 3% 3% 1, [Assumptions for demand for mining equipment] Decline of 25% in FY213 from FY212. Gradual recovery from FY214. Comparable to FY212 in FY215. Stable growth after FY215. Units YoY rate of growth 39% 15% 6% 51% 15%15% 3, Traditional Markets 15, Strategic Markets 36% -2% -2% 46% 53% -7% 7% 64% 67% 57% 1-9% -14% 52% 48% 43% 73 8, 6, 4, -34% -5% -25% -25% -51% 1-16% 33% 32% 34%37% 25% Strategic Markets The share declined by 14points (57% 43%) from FY12 to FY15. 2, 32 FY1 FY2 FY3 FY4 FY5 FY6 FY7 FY8 FY9 FY1 FY11 FY12 FY13 FY14 FY15 Plan Apr. 213 FY13 FY14 FY15 Result FY1 FY2 FY3 FY4 FY5 FY6 FY7 FY8 FY9 FY1 FY11 FY12 FY13 FY14 Plan Apr. 213 FY15 FY13 FY14 FY15 Result
Review of Previous Mid-range Management Plan: Progress of Focused Effort 13 Even when demand was sluggish, we made no change in the basic strategies and focused efforts and unfailingly implemented them. We will advance and accelerate continuing and new themes in the new mid-range management plan and implement them for growth. 1) Growth strategies based in innovation Development and launches of intelligent Machine Control models 3, [Factory shipment: Over 2,6 units (cumulative)] (as of March 31, 216) Promotion of SMARTCONSTRUCTION [No. of intelligent Machine Control model-deployed jobsites in Japan] Over 1,1 sites (as of March 31, 216) 1,2 Started SMARTCONSTRUCTION. in February 215 2, 1, 14/3 15/3 16/3 2) Growth strategies of existing businesses Japan Europe N. America 8 4 14/3 15/3 16/3 3) Structural reforms to reinforce the business foundation Expansion of parts sales Reinforcement of distribution network Saudi Arabia USA Mexico, etc. Development and launches of models compliant to newest emission regulations Bn. JPY 5 4 3 2 1 [Sales of parts] FY12 FY13 FY14 FY15 Structural reforms and continuous cost improvement efforts [Fixed costs] FY12 Results -1.7 +1.1-11.9-1.7 9.2 Reduced FY13 Results Initially Structural expected reforms Incl. about JPY1 bn. for an increase of labor cost per unit 6. -5.1 4. -15.9-12.5 2.2 Bn. JPY -.8 Announced 4. 7. Reduced FY14 Structural Reduced FY15 Exhibition Structural Reduced Results reforms Results reforms FY16 Projected
Review of Previous Mid-range Management Plan: Business Results and Progress 14 We fell short of achieving the targets of operating income ratio and ROE, as demand for construction equipment dropped much more than our assumption. We achieved the target of net debt-to-equity ratio. Concerning redistribution of profits to shareholders, we repurchased our shares. FOREX (JPY/USD) 15 12 9 Sales Bn JPY 6 3, 2,5 2, 1,5 1, 5 126 121 113 114 117 114 121 18 11 11 93 1 Net sales (left scale) 85 85 79 Operting income (right scale) Operating income ratio 1.1% 12.9% 14.8% 12.1% 12.9% 11.2% 12.3% 12.2% 11.2% 7.1% 7.5% 2,243. 4.7% 2.3% 2.6% 1,893.3 2,21.7 1,843.1 1,981.7 1,884.9 1,953.6 1,978.6-1.3% 1,854.9 1,612.1 1,356. 1,431.5 1,127.3 332.8 222.9 244.7 256.3 211.6 24.4 242. 28.5 163.4 151.9 (13.2) 23.9 29.8 95.8 67. 1,35.8 1,27.2 21 22 23 24 25 26 27 28 29 21 211 212 213 214 215 9 75 6 45 3 15 Operating Income Bn JPY -15 <Mid-Range Management Targets> 1. We will work to attain the industry s top-level profitability and financial position. 2. We will increase the level of redistribution to shareholders. 3. We will improve net debt-to-equity ratio and ROE, as we invest in our future growth. FY FY212 Results FY213 Results FY214 Results FY215 Results FY215 Targets Operating income 11.2% 12.3% 12.2% 11.2% 18~2% ROE 11.5% 12.4% 1.6% 9.% 18~2% Net debt-to- equity ratio.49.37.32.23.3 or below Consolidated payout ratio (Redistribution ratio,incl. stock buy back) Guidelines Targets 36.2% 34.7% 35.8% [55.2%] 39.8% 3~5% (-) Sales[billion yen] 1,884.9 1,953.6 1,978.6 1,854.9 2,3.±2. Foreign exchange rates JPY/USD 82.5 99.6 19.7 12.8 9~95 JPY/ EUR 16.6 132.8 139.6 132.4 12~125 JPY/RMB 13.2 16.3 17.7 19. 15.~15.3
Ⅱ. Outlook of FY216 Business Results 15
Outline of Projection for FY216 16 Consolidated net sales will decrease by 9.2% from FY215, to JPY1,685. billion. Operating income will decline by 28.1% to JPY15. billion. Operating income ratio will translate into 8.9%, down 2.3 points. Net income will drop by 33.1% to JPY92. billion. FY215 FY216 (Projection) Changes 12.8/USD 132.4/EUR 19./RMB 15/USD 119/EUR 16.2/RMB Increase (decrease) % Change Net sales 1,854.9 1,685. (169.9) (9.2)% Segment profit 22. 155. (47.) (23.3)% Other operating income (expenses) 6.5 (5.) (11.5) - Operating income 28.5 15. (58.5) (28.1)% Profit ratio 11.2% 8.9% (2.3)pts. - Other income (expenses) (3.6) (5.) (1.3) - Net income before income taxes 24.8 145. (59.8) (29.2)% Net income * 137.4 92. (45.4) (33.1)% ROE 9.% 6.2% (2.8)pts. Cash dividends per share 58yen 58yen +/- yen Consolidated payout ratio 39.8% 59.4% * Upon adoption of ASC 81, "Net income" is equivalent to "Net income attributable to Komatsu Ltd."
Projection for Segment Sales and Profit of FY216 17 Retail finance will become a separate business segment, starting in FY216. Both sales and profits of all segments of Construction, Mining & Utility Equipment, Retail Finance, and Industrial Machinery & Others will decline from FY215. FY215 % : Profit ratio [ ]: Sales after elimination of inter-segment transactions FY216 (Projection) Increase(decrease) Changes % Change Net sales 1,854.9 1,685. (169.9) (9.2)% Construction, mining & utility equipment Retail finance Industrial machinery & others [1,587.5] 1,62. [5.8] 53.9 [216.5] 22.1 [1,434.] 1,445. [4.] 43. [211.] 212. [(153.5)] (157.) [(1.8)] (1.9) [(5.5)] (8.1) Elimination (21.1) (15.) +6.1 - [(9.7)%] (9.8)% [(21.3)%] (2.3)% [(2.6)%] (3.7)% Segment profit 1.9% 22. 9.2% 155. (47.) (23.3)% Construction, mining & utility equipment 1.5% 169. 8.9% 129. (4.) (23.7)% Retail finance 24.7% 13.3 25.6% 11. (2.3) (17.4)% Industrial machinery & others 8.8% 19.3 8.5% 18. (1.3) (7.1)% Corporate & elimination.3 (3.) (3.3) - Conditions of three business segments: Construction, Mining & Utility Equipment We will work to expand sales while demand will remain sluggish. However, we project that both sales and profit will decline from FY215, affected particularly by the Japanese yen s appreciation. Retail Finance Retail Finance will become a separate business unit, starting in FY216. Both revenues and profit will decline, affected by reduced assets and the effects of foreign exchange rates. Industrial Machinery & Others Sales should increase, when the effects of the sale of shares of Komatsu House Ltd.* are removed. * We plan to sell 85% of all shares issued and outstanding to NISSEI BUILD KOGYO CO., LTD. on April 28, 216.
Construction, Mining & Utility Equipment: Projection for Sales (To Outside Customers) for FY216 18 Sales to outside customers for FY216 will decline by 9.7% from FY215, to JPY1,434. billion, reflecting negative growth in all regions except for Japan particularly due to the Japanese yen s appreciation. The share of Traditional Markets will increase to 53%. FY215 1,587.5 Vs. FY215 Billions of yen Japan North America Europe Latin America CIS China Asia Oceania Middle East Africa FY215 37.6 37.2 139.5 215. 47.7 69.6 189.5 16.9 58.6 82.4 1,587.5 FY216 (Projection) +1.3 [+.4%] FY216 (Projection) 1,434. (61.2) [(16.5)%] Total 39. 39. 137. 2. 4. 61. 166. 12. 51. 59. 1,434. Traditional Markets (2.5) (15.) [(1.8)%] [(7.)%] (7.7) Plus Minus [(16.3)%] (8.6) (23.5) [(12.4)%] [(12.4)%] (4.9) Strategic Markets [(4.6)%] (7.6) [(13.1)%] (23.4) [(28.5)%] (153.5) [(9.7)%] 1,6 1,4 1,2 1, 8 6 4 2 1,587.5 Africa 5% Middle East 4% Oceania 7% Asia 12% China 4% CIS 3% Latin America 14% Europe 9% North America 23% Japan 19% FY215 Strategic Markets 49% Traditional Markets 51% 1,434. Africa 4% Middle East 4% Oceania 7% Asia 12% China 4% CIS 3% Latin America 14% Europe 1% North America 21% Japan 21% FY216 (Projection) Strategic Markets 47% Traditional Markets 53%
Construction, Mining & Utility Equipment: Causes of Difference in Projected Sales & Segment Profit 19 Sales will decline by JPY157. billion and profit by JPY4. billion from FY215, as both will sharply be affected by the effects of foreign exchange rates. Segment profit ratio will decrease by 1.6 points to 8.9%. Billions of yen 1,8 1,6 1,4 1,2 1, 8 1,62. FY215 12.8/USD 132.4/EUR 19./RMB Sales FY215 vs. FY216(Projection) Foreign exchange rates Volume (16.2) difference & Newly others consolidated +21.4 (157.) billion yen Positive factors Negative factors FY216 Billions of yen Selling 25 price 1,445. (2.2) +2. 2 169. (Projection) 15/USD 119/EUR 16.2/RMB 15 1 5 FY215 1.5% Foreign exchange rates (32.) Segment profit FY215 vs. FY216(Projection) Volume difference & others (13.5) Newly consolidated +2.7 Fixed costs +.8 (4.) billion yen Positive factors Negative factors Segment profit ratio Selling price +2. 129. FY216 (Projection) 8.9%
Retail Finance Business: Projection for Sales and Segment Profit 2 Assets will decrease from March 31, 216, affected by the effects of foreign exchange rates and a decline in new contracts in China and Oceania. Revenues will decline, affected by reduced assets and the effects of foreign exchange rates. 8 Assets Mar 31, 216 vs. Mar 31, 217(Projection) 7 Revenues FY215 vs. FY216(Projection) 7 6 651.5 594.5 6 5 53.9 Sales 43. Segment profit 5 4 North America North America 4 3 3 2 1 Others Oceania China Europe Japan Mar 31, 216 112.7/USD 127.7/EUR 17.4/RMB Others Oceania China Europe Japan Mar 31, 217 (Projection) 15/USD 119/EUR 16.2/RMB 2 1 FY215 13.3 12.8/USD 132.4/EUR 19./RMB FY216 11. (Projection) 15/USD 119/EUR 16.2/RMB 216/3E 217/3E Changes Interest-bearing debt 483.5 441.6 (41.8) Interest-bearing debt, net 476.6 434.7 (41.9) FY215 FY216 (Projection) Changes ROA 2.% 1.7% (.3)% Net D/E ratio 3.4 3.42 +.2pts.
Industrial Machinery & Others: Projection for Sales and Segment Profit 21 Sales will decrease by 3.7% from FY215, to JPY212. billion. Segment profit will decline by JPY1.3 billion to JPY18. billion. Sales should increase, when the effects of the sale of shares of Komatsu House Ltd. are removed. Billions of yen 25 2 15 1 Sales 221.5 22.1 212. Billions of yen 3 25 2 15 1 Segment profit :Segment profit ratio 7.3 % 8.8 % 8.5 % 16.2 19.3 18. (%) 1 5 5 FY214 FY215 FY216 (Projection) Breakdown of sales Komatsu Industries Corp., etc. [total of press and sheet-metal machines] FY214 FY215 FY214 FY215 FY216 (Projection) FY216 (Projection) Increase (decrease) Changes % change 64. 58. 58.6 +.5 +1.% Komatsu NTC Ltd. [represented by wire saws] 73.6 [7.8] 71. [6.9] 76.1 [13.2] +5.1 [+6.3] +7.2% [+9.4%] Gigaphoton 29.2 34. 33. (1.) (3.)% Komatsu House 16.3 16.1 - (16.1) - Others 38.2 4.7 44. +3.2 +8.% Total 221.5 22.1 212. (8.1) (3.7)% * We plan to sell 85% of all shares issued and outstanding to NISSEI BUILD KOGYO CO., LTD. on April 28, 216.
Construction and Mining Equipment: Demand and Outlook for 7 Major Products 22 In FY215 demand declined by 14% from FY214, affected by a sharp drop in Strategic Markets, such as China, while demand was steady in some regions, such as Europe. In FY216 demand will continue to decline as it did in FY215. Global demand will decline from FY215 by 5% to 1%. Units Annual demand for 7 major products Growth rate Units 15, Quarterly demand for 7 major products Growth rate Japan N. America 12% Europe China Others Y-o-Y growth rate 9% index :FY7=1 1 8 64 92 FY15:-14% FY16:-5% -1%(Projection) 97 9 93 84 72 12, 9, 6, 6% +11% +14% 3% +7% +8% +7% -1% -7% -2% -3% +2% -5% -4% -9% -11% -1% -12% % -15% -19%-16% -18% -3% 3, [Source]: Demand for 7 major products estimated by Komatsu (Projection) FY11/1Q FY11/ FY11/ FY11/ FY12/1Q FY12/ FY12/ FY12/ FY13/1Q FY13/ FY13/ FY13/ FY14/1Q FY14/ FY14/ FY14/ FY15/1Q FY15/ FY15/ FY15/
Construction and Mining Equipment: Demand in Major Markets (1) Japan 23 In FY215 demand declined by 18% from FY214. In FY216 demand will decline by 8% to 13% from FY215, as construction investment will continue to decrease. Demand for new equipment (7 major products) and construction investment Quarterly demand for 7 major products Construction investment Trillion of yen 1 9 8 7 6 5 Exports of used equipment FY15:-18% FY16:-8% -13%(Projection) Demand for new equipment Demand for new equipment/ Export of used equipment (Units) 8 6 4 2 Y-O-Y growth rate 1% 75% 5% 25% % -25% -5% -75% -1% FY11/1Q 9 FY12/1Q Demand (units) Y-o-Y change (%) 14 Index :FY7/=1 FY13/1Q 156 : -16% FY14/1Q 1 FY15/1Q Units 16, 84 12, 8, 4, 4 3 2 1 FY98 FY99 Private-sector residential Private-sector non-residential Government construction FY FY1 FY2 FY3 FY4 FY5 FY6 FY7 (Projection) [Sources]Construction investment by the Ministry of Land, Infrastructure, Transport & Tourism, and Research Institute of Construction and Economy Demand for 7 major products and No. of exported used equipment estimated by Komatsu FY8 FY9 FY1 FY11 FY12 FY13 FY14 FY15 FY16 Units 12, 8, 4, Quarterly demand for hydraulic excavators (Rental & regular uses) FY11/1Q rental companies Regular customers FY12/1Q FY13/1Q FY14/1Q FY15/1Q Y-O-Y growth rate Rental 53% Regular +6%
Construction and Mining Equipment: Demand in Major Markets (2) North America 24 In FY215 demand declined by 6% from FY214. In FY216, while demand for construction equipment will remain steady in the United States, it will be sluggish in Canada and demand will be slack in the mining and energy sectors. Total demand will decline by 5% to 1%. Demand for 7 major products and US housing starts Quarterly demand for 7 major products Demand for 7 major products (Units) 8, 6, FY15:-6% FY16:-5% -1%(Projection) Housing starts Housing starts in ten thousands 25 2 15 1 5 Y-O-Y growth rate 6% 4% 2% % -2% -4% -6% Index Demand (units) Y-o-Y change (%) 96 98 16 113 : -1% :FY7/=1 12 Units 3, 2, 1, FY15/1Q FY14/1Q FY13/1Q FY12/1Q FY11/1Q 4, 2, FY4 FY5 FY6 FY7 FY8 FY9 FY1 FY11 FY12 FY13 FY14 FY15 FY16 USA Canada 1% 8% 6% 4% 2% Breakdown of demand by segment (Unit basis) Rentaldistributor (DORF) Rental -Regular Mining & energy Road Y-O-Y growth rate Rental -15% Mining & energy -24% Others +2% [Source]: Demand for 7 major products estimated by Komatsu (Projection) % FY7 FY8 FY9 FY1 FY11 FY12 FY13 FY14 FY15 Construction
Construction and Mining Equipment: Demand in Major Markets (3) Europe 25 In FY215 demand should have increased by 3% from FY214. In FY216 demand will remain firm in major markets centering on Germany, and a recovery trend will continue in northern, southern and eastern Europe. Total demand will increase by +/-% to 5%. Annual demand for 7 major products Quarterly demand for 7 major products Units 8, 7, FY15:+3% FY16:+/-% +5%(Projection) Y-O-Y growth rate 6% 4% Demand (units) Y-o-Y change (%) 5 44 53 54 54 Units 15, 1, 2% 5, 6, % 5, -2% -4% Index :FY7/=1 : -1% 4, FY11/1Q FY12/1Q FY13/1Q FY14/1Q FY15/1Q 3, 2, 1, FY7 FY8 FY9 FY1 FY11 FY12 FY13 FY14 FY15 FY16 (Projection) [Source]: Demand for 7 major products estimated by Komatsu Units 7, 6, 5, 4, 3, 2, 1, Region demand for 7 major products (Excl. 6t class) Southern Eastern Other Western Countries Northern The UK., France, and Germany FY7 FY8 FY9 FY1 FY11 FY12 FY13 FY14 35, 3, 25, 2, 15, 1, 5, FY14 FY15 (Apr.-Feb.) (Apr.-Feb.)
Construction and Mining Equipment: Demand in Major Markets (4) China 26 In FY215 demand dropped by 36% from FY214. In FY216 demand will still continue to decline from FY215 and result in a rate between -2% and -25%. Units Annual demand for 7 major products (Foreign makers) 12, 1, 8, FY15:-36% FY16:-2% -25%(projection) Y-O-Y growth rate 15% 1% 5% Quarterly demand for 7 major products (Foreign makers) 119 Demand (units) Y-o-Y change (%) 8 86 : +1% 38 38 Units 3, 2, 1, 6, % 4, -5% 2, Hours 15 1 5 FY3FY4FY5FY6FY7FY8FY9FY1FY11FY12FY13FY14FY15FY16 (Projection) KOMTRAX in China : Average operating hours per month 2 Operating hours (left scale) -23% 2% 19% -7% -9% -11%-6%-12% -13% -15%-13% -12% -17% Y-o-Y (right scale) -7% 3% -13% -8% -8% -8% -1% -14% -22% -16% -1% -29% -15% 3% 8% 6% 4% 2% % -2% -4% -6% -8% -1% Units 2, 15, 1, 5, FY11/1Q Index :FY7/=1 FY12/1Q FY13/1Q Monthly demand for hydraulic excavators : Total of 6-ton and larger models) FY211 FY212 FY213 FY214 FY215 4 5 6 7 8 9 1 11 12 1 2 3 (month) FY14/1Q <Chinese New Year> : Jan. 23, 212 : Feb. 1, 213 : Jan. 31, 214 : Feb. 19, 215 : Feb. 8, 216 : Jan. 28, 217 FY15/1Q [Source]: Demand for 7 major products and hydraulic excavators estimated by Komatsu
Construction and Mining Equipment: Demand in Major Markets (4) Southeast Asia 27 In FY215 demand declined by 15% from FY215. In FY216 demand will remain on a declining trend in general from FY215, as mainly affected by slack Chinese economy, resulting in a rate between +/- and -5%. Units 4, 3, Annual demand for 7 major products Indonesia Others Malaysia Thailand FY15:-15% FY16:+/-% -5%(Projection) Y-O-Y growth rate 16% 12% 8% 4% Quarterly demand for 7 major products Indonesia Others 227 Malaysia Thailand Y-o-Y change (%) 167 132 115 98 Units 12, 9, 6, 3, % -4% -8% Index : FY7/=1 : -15% 2, FY11/1Q FY12/1Q FY13/1Q FY14/1Q FY15/1Q 1, FY4FY5FY6FY7FY8FY9FY1FY11FY12FY13FY14FY15FY16 [Source]: Demand for 7 major products estimated by Komatsu (Projection) 7 6 5 4 3 2 1 Units FY9/1Q Forestry Agriculture Construction Mining FY1/1Q Indonesia: Demand for construction & mining equipment by industrial sector FY11/1Q FY12/1Q FY13/1Q Mining customers FY15 : -46% FY14/1Q FY15/1Q
Construction and Mining Equipment: Demand for Mining Equipment and Outlook 28 In FY215 global demand remained sluggish and should have declined by 16% from FY215, although the rate of decline became smaller. In FY216 global demand will also fall 15% to 2% from FY215, centering on limited renewal demand. Annual demand for mining equipment Quarterly demand for mining equipment Dump trucks: 75 tons (HD785) and larger, Bulldozers: 525HP (D375) and larger, Excavators: 2 tons (PC2) and larger, Wheel loaders: 81HP (WA8) and larger, Motor graders: 28HP (GD825) and larger Units 1, 8, 6, FY16:-15% -2%(Projection) +6% +15% +39% +51% -5% -25% -34% -51% Y-o-Y change -16% 5% % -5% -1% Units 3, Y-o-Y change 1% Middle East & 5% Africa 2,5 +25% +5% Oceania -2% -11% -15% -22% % -25% 2, -32% -24% Asia -45% -54% -12% -26% -33% -5% Japan&China -55% -49% 1,5 Middle East & Africa Oceania Asia Japan&Chin a 4, Europe&CIS 1, Europe&CIS 2, Latin America N. America 5 Latin America N. America FY7FY8FY9FY1FY11FY12FY13FY14FY15FY16 (Projection) Y-o-Y change FY12/1Q FY13/1Q FY14/1Q FY15/1Q Y-o-Y change Note: Demand estimated by Komatsu
Construction and Mining Equipment: Sales of Mining Equipment 29 FY215 sales declined by 1% from FY214, to JPY447.3 billion, as sales of equipment remained sluggish. FY216 sales will decline from FY215, affected by reduced demand for equipment and the effects of foreign exchange rates. Annual sales of mining equipment (incl. parts and service) Quarterly sales of mining equipment (incl. parts and service) 8 6 4 2 +22% +18% 356.5 FY7 422. FY8-14% 361.5 FY9 +33% +15% +11% 417. FY1 554. FY11 614.5 FY12-18% -1% -1% -12% 56.3 499.3 447.3 394.1 FY13 FY14 FY15 FY16 Projection 26.8 96.3 91.7 84.2 196.1 FY14 14.6 115.6 194.3 214.9 FY15 FY16 Projection Y-o-Y change N. America Y-o-Y change 5% 25 +24% +2% +2% +4% % -1% -4%-7% -% -4% -18% 2-7% -17% -23% -13% -12% -5% -27% 163.4 157. 155.2 15.5 15 139.1 13.8 129.6 128.8 12.9 115.9 119.2 118.7 11.1 113.7 17.2 17.5 1 Equipment Service, etc Parts 5 Middle East & Africa Oceania Asia China Europe & CIS Latin America FY15/1Q FY14/1Q FY13/1Q FY12/1Q 44.853.5 52.3 49. 37.534.4 33.6 35. 33.2 23.5 23.2 24.3 22.9 22.1 23.3 22.8 45.8 46.4 5.8 53.1 Y-o-Y change 5% 56.9 52.7 54.9 5.4 FY15/1Q FY14/1Q % -5% Equipment Service, etc. Parts
Construction and Mining Equipment: Sales of Parts 3 FY215 sales of parts increased by 3% from FY214, to JPY397.5 billion. When the effects of foreign exchange rates are removed, sales were about flat from FY214. FY216 sales will decrease by 8% from FY215, affected by the effects of foreign exchange rates. Billions of yen 6 5 4 3 2 1 Annual sales of parts 187.4 196.1 214.9 194.3 138.5 158.171.5 118. 15. 113. FY7 FY8 FY9 FY1 FY11 FY12 FY13 FY14 FY15 FY16 (Projection) Billions of yen Quarterly sales of parts Construction equipment Mining equipment Construction equipment Mining equipment Y-o-Y change Y-o-Y change Y-o-Y change (%) Y-o-Y change (%) +18% 14 +13% +14% 2% +18% +19% +2% +6% +14% +1% +3%-8% +11% +11% +12% 2% 12-1% % -1% +3% +8% +5% +7% -3% +4% -3% 12.9 +1% 12.1 % -7% 397.5 1. 1 98.8 94.4 92.4 387.2-2% 92.8 363.7 364.7 88.8 88.1 91.6 11.3 85.2 95.3 319.5 8.3 79.7-2% 317. 8 49.8 44.9 74.3 47.2 44.4 28. 265. 191.1 182.6 259.5 176.3 17.4 4. 45.2 45.1 238. 159. 148. 37.336. 44.2 41.8 45.746.4 49.2 46.1 6 141.5 34.7 154.5 152. 12. 4 49.2 46.3 47.3 5.8 54.9 46.4 53.1 52.7 56.9 43. 43.7 45.2 44.6 45.8 5.4 2 39.6 FY12/1Q FY13/1Q FY14/1Q FY15/1Q
Projection of Capital Expenditures, Depreciation, R&D Expenses and Fixed Costs 31 We will center capital investment on spare parts operation, IoT, production reforms and consolidation of sales bases in Japan, while curtailing the total amount of CAPEX. We will focus R&D expenses on emission controls, development of products by application and region, and innovation-based development of next-generation products. While continuing to curtail overall fixed costs by continuing structural reforms, we will secure funds to invest in future growth. Billions of yen 1 Investment in production and other facilities* and depreciation *Excl. investment in rental assets Billions of yen 1 R&D Expenses 3.6% 3.8% 4.3% Billions of yen 5 Fixed costs 8 6 4 66.1 7.7 56.8 55. 8 4.7 8.5 8.9 1.5 6.2 5. 54. 52.6 5.2 6 4 72.5 7.7 4 3 2 61.3 62.1 61.8 62. 2 5.5 5. 2 1 FY214 FY215 FY216 Projection Industrial Machinery & Others Construction, Mining & Utility Equipment and Retail Finance Depreciation FY214 FY215 FY216 Projection Industiral Machinery & Others Construction, Mining & Utility Equipment % of sales FY214 FY215 FY216 Projection
Ⅲ. Mid-Range Management Plan (FY216-18) 32
33 Mid-Range Management Plan (FY216-18) April 27, 216 Tetsuji Ohashi President and CEO Komatsu Ltd.
1. Catchphrase of Mid-range Management Plan 34 Komatsu Group employees worldwide will team up with distributors, suppliers and other partners, innovate customers GEMBA (workplace) together with them, and provide innovation designed to create new values, thereby working for growth of our core businesses of construction and mining equipment as well as industrial machinery toward our 1 th anniversary and beyond.
2. Our Surrounding Environment and Tasks 35 We will work for growth as we meet changes in our surrounding environment and tasks Changes in the environment of demand Assumed changes of demand (conceptual) Changes in the social environment Demand for construction and mining equipment Construction and mining equipment remain as a growth industry, but will be sluggish for the time being. Demand for industrial machinery Demand will grow, supported by increases in capital investment by automakers and demand for semiconductors. Surrounding environment and tasks of Komatsu Shortage of skilled workers on jobsites Labor shortage is growing at civil engineering and construction jobsites in Japan. Shortage of skilled workers is becoming evident in Western and emerging countries as well. IoT IoT*-based innovation is underway at manufacturing and machine operation jobsites. GEMBA tasks IoT* stands for Internet of Things and is designed to create new value by connect things on the Internet. ESG tasks Evaluations on corporate efforts in Environment, Society and Governance will become more important. Growth Strategies Based on Innovation Growth Strategies of Existing Businesses Structural Reforms Designed to Reinforce the Business Foundation Improvement of safety, productivity and TCO* Needs to improve safety and productivity and reduce TCO are growing at construction and mining equipment jobsites. TCO* stands for Total Cost of Ownership and means total costs of customers jobsite operations.
3. Basic Strategies of Mid-range Management Plan In response to our surrounding environment and tasks, we will work to achieve sustainable growth by focusing efforts and through open innovation, when applicable, in 1) Growth strategies based on innovation, 2) Growth strategies of existing businesses, and 3) Structural reforms designed to reinforce the business foundation, centering on DANTOTSU products, service and solutions. 1. Growth Strategies Based on Innovation Development of next-generation construction and mining equipment as well as next-generation components Deployment of SMARTCONSTRUCTION and development of next-generation KOMTRAX Deployment of AHS *1 and reinforcement of platform for mining solutions Development of DANTOTSU industrial machinery by promoting in-house production of key components Gigaphoton s development of EUV *2 and new products *1: AHS stands for Autonomous Haulage System and means a system to operate unmanned dump trucks. *2: EUV stands for Extreme Ultraviolet, and EUV light source is a next-generation semiconductor manufacturing technology. 36 IoT at Komatsu DANTOTSU Products Production being connected IoT enables connection and sharing of realtime information concerning all processes from production to sales. Plants being connected to market information. Growth Strategies of Existing Businesses Contributions to expanding sales by developing new products, incl. DANTOTSU products Expansion of earnings in the value chain Expansion of the mining equipment business Expansion of the construction equipment business (DANTOTSU No. 1 in Asia, enhancement of global presence in quarrying and cement production companies, expansion of application specific models, etc.) Expansion of the industrial machinery business Expansion of the forest machinery business M&A 3. Structural Reforms Designed to Reinforce the Business Foundation Production reforms through connected plants Continuous reduction of costs (production and fixed costs) Reforms of spare parts operation Lean and powerful development Development of human resources with global perspective and framework to promote diversity for sustainable growth
4. Our IoT: Connecting Three GEMBA of Customers, Distributors and Our Plants 37 SMARTCONSTRUCTION AHS Innovation of Customer GEMBA Innovation of Distributor GEMBA Distributor Innovation of Production GEMBA
Procurement Manufacturing Sales and Aftersales Service 5. ESG Efforts We will further strengthen our efforts to meet social needs in the areas of Environment, Society and Governance based on The KOMATSU Way. Environment Lifecycle of construction equipment Manufacturing accounts for about 2% of total CO2 emissions. Use Use of machines accounts for about 9% of total CO2 emissions. CO2 reduction from machines in use Customers Recovery and Disassembly Society Improvement of safety at customers jobsites Complete unmanned operation Working for no accidents at customers jobsites by developing technology to improve safety Social contribution efforts ICTintensive construction Governance Corporate governance Reinforcement of corporate governance Reinforcement of internal control Global management system Promotion of diversity Thorough safety, health and compliance 38 *2 Work site Equipment operating information Vehicle Information Management System (KOMTRAX) Construction management Construction cost Fleet management Accurate servicing Distributor Optimized maintenance proposition CO2 reduction in manufacturing 25% reduction per Work volume *1 *1: New models to be sold in 225 as compared to 27 Japan: 57% reduction *2 Target rate of reduction in 22 Overseas: 32% reduction *2 Improvement rate of unit per mfg. value Benchmark years: 2 in Japan, 21 overseas Applicability: Komatsu Group s main plants worldwide Komatsu-made demining machine in Cambodia Growing with local communities Assistance to welders school in India School built in March 215. 6th one in Cambodia Science class for children at Komatsu-no-mori Health promotion plan Risk management Risk Management Committee BCP *3 Information security Identification of potential risks *3: BCP stands for Business Continuity Plan, and we have developed it to continue important operations or make a quick recovery from damages of natural disasters or accidents. Improvement of corporate governance Reinforcement of competitive manufacturing Brand Management The KOMATSU Way
6. Growth Toward Our 1 th Anniversary and Beyond Although we assume that demand will remain sluggish for the time being, we will achieve our growth above the industry s average by promoting growth based on innovation and of existing businesses. 39
7. Targets of Mid-range Management Plan 4 In addition to our conventional top-level profitability and financial position in the industry, we will work for growth above the industry s average, even while demand will remain sluggish. We will place more importance on redistribution of profits to shareholders, and set the goal of a consolidated payout ratio of 4% or higher, and maintain the policy of not decreasing dividends as long as the ratio does not surpass 6%. By segmenting the retail finance business, we will enhance transparency of profitability and financial position of consolidated and retail finance business performance. The retail finance business will set up its own target figures. [Stance on Targets] [Targets] Growth Aim at a growth rate above the industry s average. Profitability Aim at an Industry s top-level operating income ratio. Efficiency Aim at 1%-level ROE. Shareholder return Financial position Keep a fair balance between investment for growth and shareholder return (incl. stock buyback), while placing main priority on investment. Set the goal of a consolidated payout ratio of 4% or higher, and maintain the policy of not decreasing dividends as long as the ratio does not surpass 6%. Aim at industry s top-level financial position. Retail finance business ROA: 2.% or above 5. or under for net debt-to-equity ratio
41 Ms. Miku Tashio (Courtesy of AFLO) Ms. Miku Tashiro, a member of the Komatsu Women s Judo Team, will represent Japan in the women s 63kg category of 216 Rio de Janeiro Olympics She was chosen by All Japan Judo Federation after 216 All-Japan Weight Category Championships for Chosen Contestants. We would like to ask for your continuing support for her. She works at Komatsu Labor Union. Cautionary Statement The announcement set forth herein contains forward-looking statements which reflect management's current views 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" 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. 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 cost 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; and, the impact of regulatory changes and accounting principles and practices. Business Coordination Department, KOMATSU LTD. TEL: +81-3-5561-2687 FAX: +81-3-3582-8332 http://www.komatsu.com/
Appendix 42
6 4 <Appendix> Construction, Mining & Utility Equipment: Quarterly Sales and Segment Profit Quarterly sales 429.7 49.3 368.4 471.9 416.6 413.4 42.7 51.4 418.5 425.1 442. 477.7 42.7 391.4 425.5 421.3 43 2 Exchange rates /USD /EUR /RMB FY12/1Q FY13/1Q FY14/1Q FY15/1Q 12/1Q 12/ 12/ 12/ 13/1Q 13/ 13/ 13/ 14/1Q 14/ 14/ 14/ 15/1Q 15/ 15/ 15/ 8.6 78.7 8.1 9.7 97.3 98.6 99.7 12.7 12.5 12.8 114.1 119.2 121.3 122.6 121.2 118. 14.6 98.3 13.5 12.1 126.4 129.9 135.1 139.9 14.9 137.7 142.8 136.9 133. 136.2 132.3 128. 12.8 12.4 12.8 14.6 15.8 16.1 16.3 16.9 16.4 16.6 18.5 19. 19.6 19.5 19. 17.9 12 1 8 6 4 2 1% Quarterly segment profit Segment profit Segment profit ratio Percentage of sales in Strategic Markets 65% 62% 58% 61% 57% 56% 56% 59% 6% 54% 53% 53% 51% 48% 47% 77.9 45% 55.3 6.5 54.2 52.6 53.1 58.3 57.9 58.8 55 55 4 47.2 38.8 45.1 44.5 47.1 12.6% 13.5% 1.5% 12.8% 12.6% 12.9% 13.9% 15.5% 13.8% 13.8% 12.5% 11.6% 11.7% 11.5% 1.5% 11.2% FY12/1Q FY13/1Q FY14/1Q FY15/1Q Breakdown of sales (%) Parts, etc. Mining equipment Construction equipment (Strategic Markets) Construction equipment (Traditional Markets) 8% 6% 4% 2% % 41% 42% 45% 39% 22% 25% 22% 2% 23% 18% 15% 19% 48% 48% 49% 42% 49% 5% 52% 49% 55% 56% 56% 49% 15% 13% 9% 16% 13% 12% 12% 11% 8% 9% 9% 8% 23% 2% 21% 22% 21% 18% 16% 17% 14% 15% 13% 13% 14% 15% 17% 21% 15% 19% 21% 2% 17% 21% 2% 23% 21% 23% 23% 28% FY12/1Q FY13/1Q FY14/1Q FY15/1Q
<Appendix> Construction, Mining & Utility Equipment: Quarterly Sales (To Outside Customers) by Region 44 6 5 4 3 2 1 Exchange rates /USD /EUR /RMB 428.9 48.7 22.4 5.2 25.1 367.9 44.3 9. 54.8 22.2 4.4 78.5 43.5 52.4 34.7 4.7 21.7 2.4 21.9 19.2 24.4 65.2 27.9 6. 7.2 64.4 23. 22.8 63. 54.6 471.3 28.2 1.9 5.2 52.3 36.9 23.8 65.2 26.5 92.7 62.5 69.8 76. 84.2 19.1 415.9 412.8 42. 35.4 418.1 424.7 24.9 24.3 28.1 25. 29.3 13.6 13.6 9. 58.6 14.8 15.7 32.1 35.8 47.3 39.7 36.7 43.3 49.6 48.5 47.9 43.9 55.4 16.6 39.5 27. 31.3 41.4 16.1 35.3 13.6 17.2 83.5 18.5 14.3 63. 65.1 65.6 61. 63.6 36.6 26.7 28. 34.3 3.4 4. 62.7 73.9 69.2 73.9 64. 61.8 66.4 5.8 3.8 83.5 95.6 96.4 65.8 28.3 11.3 33.3 51.6 24.5 14.3 69.5 32.8 29.1 18.8 31.1 56.7 23.3 11.9 71.3 4.9 82.5 17.5 85.8 93. 85.8 42. 39.8 23.7 2.3 17.2 14. 27.1 29.8 52.9 46.8 2.2 14.4 11.5 11.7 59.7 38. 83.1 49.3 33.3 9.3 17.5 2.8 14.6 12.7 28.1 27.4 48.2 42.7 17.6 22.3 13.1 11.2 59.2 51.1 31.2 38.9 113. 113.7 68. 8.5 81.8 79.4 FY12/1Q FY13/1Q FY14/1Q FY15/1Q 12/1Q 12/ 12/ 12/ 8.6 78.7 8.1 9.7 14.6 98.3 13.5 12.1 12.8 12.4 12.8 14.6 13/1Q 13/ 13/ 13/ 97.3 98.6 99.7 12.7 126.4 129.9 135.1 139.9 15.8 16.1 16.3 16.9 441.5 476.9 14/1Q 14/ 14/ 14/ 12.5 12.8 114.1 119.2 14.9 137.7 142.8 136.9 16.4 16.6 18.5 19. 424.7 42.7 15/1Q 15/ 15/ 15/ 121.3 122.6 121.2 118. 133. 136.2 132.3 128. 19.6 19.5 19. 17.9 Africa Middle East Oceania Asia China CIS Latin America *1 Europe North America *1 Japan *1: Due to the acquisition of a distributor in Mexico, a part of sales in Mexico was reclassified from North America to Latin America, staring in FY215. (Corresponding sales for FY212.were also reclassified accordingly. )
<Appendix> Industrial Machinery & Others: Quarterly Sales and Segment Profit 45 1 Quarterly sales 75 5 43. 54.1 53.4 65.6 4.3 59.2 45.3 64.2 43.3 59. 53.5 65.6 44.7 56. 53.6 65.7 25 Exchange rates /USD /EUR /RMB FY12/1Q FY13/1Q FY14/1Q FY15/1Q 12/1Q 12/ 12/ 12/ 13/1Q 13/ 13/ 13/ 14/1Q 14/ 14/ 14/ 15/1Q 15/ 15/ 15/ 8.6 78.7 8.1 9.7 97.3 98.6 99.7 12.7 12.5 12.8 114.1 119.2 121.3 122.6 121.2 118. 14.6 98.3 13.5 12.1 126.4 129.9 135.1 139.9 14.9 137.7 142.8 136.9 133. 136.2 132.3 128. 12.8 12.4 12.8 14.6 15.8 16.1 16.3 16.9 16.4 16.6 18.5 19. 19.6 19.5 19. 17.9 15 Quarterly segment profit Segment profit Segment profit ratio 11.3% 1 5-5 5.5% 7.9% 6.7% 7.3% 7.2% 7.% 7.3% 7.6% 8.3% 3.7% *1 7.3 2.3 1.7% 2.% 1.% 3.9 1.4% 4.5 4.4 3.1 4.6 3.8 3.2 4.2 2.3.9.8 *1.9.5-8.1% FY12/1Q FY13/1Q FY14/1Q FY15/1Q -3.6 *1 Including a loss of JPY1.8 bn on Komatsu NTC s wire saw inventories (: JPY-7.6 bn, and : JPY-3.2 bn)
<Appendix> Orders received / Sales Index for Mining Equipment (6 Months) 46 Komatsu America (Mining eqpt) 2% 15% Orders received/sales Index Avg. orders in value for 6 months/avg. factory shipment in value for 6 months) 73E, 83E, 86E, 93E, 96E, 1% 5% % 12/6 12/9 12/12 13/3 13/6 13/9 13/12 14/3 14/6 14/9 14/12 15/3 15/6 15/9 15/12 16/3 Komatsu Mining Germany 2% 15% PC3, PC4 PC55, PC8 1% 5% % 12/6 12/9 12/12 13/3 13/6 13/9 13/12 14/3 14/6 14/9 14/12 15/3 15/6 15/9 15/12 16/3 Komatsu Ltd. (Mining eqpt) HD785, HD15 PC2,PC3, PC4, WA8 up D375A up GD825A up 2% 15% 1% 5% % 12/6 12/9 12/12 13/3 13/6 13/9 13/12 14/3 14/6 14/9 14/12 15/3 15/6 15/9 15/12 16/3
<Appendix> Orders received / Sales Index for Industrial Machinery (6 Months) 47 Komatsu Industries Avg. orders in value for 6 months/avg. factory shipment in value for 6 months) 2% Orders received/sales Index 15% 1% 5% % 12/6 12/9 12/12 13/3 13/6 13/9 13/12 14/3 14/6 14/9 14/12 15/3 15/6 15/9 15/12 16/3 Komatsu NTC (Excl. wire saws) 2% 15% 1% 5% % 12/6 12/9 12/12 13/3 13/6 13/9 13/12 14/3 14/6 14/9 14/12 15/3 15/6 15/9 15/12 16/3
<Appendix> Overall Results for Fourth Quarter (January March, 216) of FY215 48 Sales and profits Consolidated net sales for FY215 Q4 declined by 1.6% from FY214 Q4, to JPY484.4 billion. Operating income declined by 1.4% from FY214 Q4, to JPY53.9 billion. Operating income ratio remained flat at 11.1% from FY214 Q4. Net income attributable to Komatsu Ltd. declined by 1.2% from FY214 Q4, to JPY33.6 billion. Jan.-Mar., 215 Jan.-Mar., 216 Changes 119.2/USD 136.9/EUR 19./RMB 118./USD 128./EUR 17.9/RMB Increase (decrease) % Change Net sales 542. 484.4 (57.6) 1.6% Segment profit 59.7 55. (4.7) 7.9% Other operating income (expenses).3 (1.1) (1.5) - Operating income 6.1 53.9 (6.2) 1.4% Profit ratio 11.1% 11.1% ±. ホ イント - Other income (expenses) (4.3) (2.1) +2.1 - Net income before income taxes 55.8 51.7 (4.1) 7.4% Net income * 37.4 33.6 (3.8) 1.2% * Upon adoption of ASC 81, Net income is equivalent to Net income attributable to Komatsu Ltd.
<Appendix> Segment Sales and Profits for Fourth Quarter (January March, 216) of FY215 49 Construction, Mining & Utility Equipment: Sales declined by 11.8% from FY214 Q4, to JPY421.3 billion. Segment profit declined by 14.9% from FY214 Q4, to JPY47.1 billion. Segment profit ratio also decreased.4 points to 11.2%. Industrial Machinery & Others: Sales increased by.2% from FY214 Q4, to JPY65.7 billion. Segment profit advanced 6.8% to JPY7.3 billion. % : Profit ratio [ ]: Sales after elimination of inter-segment transactions Jan.-Mar., 215 Jan.-Mar., 216 Increase (decrease) Changes % Change Net sales 542. 478. (16.) (3.2)% Construction, mining & utility equipment Industrial machinery & others [476.9] 477.7 [65.] 65.6 [42.7] 421.3 [63.6] 65.7 [(56.2)] (56.3) [(1.3)] +.1 [(11.8)%] (11.8)% [(2.1)%] +.2% Elimination (1.2) (2.6) (1.3) - Segment profit 11.% 59.7 11.4% 55. (4.7) (7.9)% Construction, mining & utility equipment Industrial machinery & others 11.6% 7.% 55.4 4.5 11.2% 11.3% 47.1 7.3 (8.2) +2.7 (14.9)% +6.8% Corporate & elimination (.2).5 +.7 -