1 Business Results for Nine Months (April-December, 217) of FY217 Telephone conference January 31, 218 Presented by Mikio Fujitsuka Yasuhiro Inagaki Executive Vice President and CFO Senior Executive Officer and General Manager of Business Coordination Department
Contents 2 Ⅰ. Business Results for Nine Months (April December, 217) of FY217<PP4-14> PP4-6: PP7-8: PP9-11: P12: P13: P14: Highlights of Business Results for the Third Quarter (Oct- Dec, 217) Highlights of Business Results for Nine Months (Apr- Dec, 217) Construction, Mining & Utility Equipment: Results for Nine Months (Apr- Dec, 217) KMC s Business Results for Nine Months (Apr- Dec, 217)* Retail Finance: Assets and Revenues for Nine Months (Apr- Dec, 217) Industrial Machinery & Others: Results for Nine Months (Apr- Dec, 217) Consolidated Balance Sheets Ⅱ. Outlook of FY217 Business Results <PP16-25> PP16: PP17-22: PP23-24: P25: Projection for FY217 ending March 31, 218: Outline and Segment Sales and Profit Construction, Mining & Utility Equipment: Demand for 7 Major Products and Projection (Global and By Region) Construction, Mining & Utility Equipment: Demand for and Sales of Mining Equipment and Projections Construction, Mining & Utility Equipment: Sales of Parts and Projection Appendix <PP27-34> PP27-31: PP32-34: Quarterly Results Book-to-Bill Ratio [Orders Received / Sales (6 Months)] *KMC stands for Komatsu Mining Corp
3 Ⅰ. Business Results for Nine Months (April December, 217) of FY217 Note On April 5, 217, we completed the acquisition of Joy Global Inc. On April 19, Joy Global Inc. changed its trade name to Komatsu Mining Corp. (hereafter KMC ). From the first 3-month period of FY217, our consolidated business results include those of KMC as a consolidated subsidiary.
Highlights of Business Results for Third Quarter (Oct Dec, 217) of FY217 4 Consolidated net sales increased by 5.2% from the corresponding period a year ago, to JPY646.8 billion. Operating income advanced by 76.1% to JPY75.5 billion. Operating income ratio increased by 1.7 points to 11.7%. Net income attributable to Komatsu Ltd. improved by 73.% to JPY53.3 billion. Oct.-Dec.,216 Oct.-Dec.,217 Changes 16.9/USD 113./USD Komatsu KMC Increase Change 116.7/EUR 133.2/EUR conventional (decrease) % 15.7/RMB 17./RMB *1 Net sales 43.5 646.8 561.4 85.3 +216.2 +5.2% Segment profit (loss) 43.6 87.1 82.4 *2 4.6 +43.5 +99.9% Other operating income (expenses) (.7) (11.5) (11.7).1 (1.8) - Operating income (loss) 42.8 75.5 7.7 *2 4.8 +32.6 +76.1% Profit ratio (loss ratio) 1.% 11.7% 12.6% 5.7% +1.7pts. - Other income (expenses) 2.2 (4.3) (6.6) - Income before income taxes 45.1 71.2 +26. +57.7% Net income *3 3.8 53.3 +22.4 +73.% Notes 1) Figures represent those which KMC s business results are excluded. 2) KMC s segment and operating losses include temporary expenses in the table on the right. 3) Upon adoption of ASC 81, Net income is equivalent to Net income attributable to Komatsu Ltd. * Depreciation after PPA (3.6) Start-up expenses, etc. (.4) Total (4.1) Note: PPA stands for Purchase Price Allocation. It is an accounting process of valuating and allocating acquired assets and liabilities to fair prices.
Segment Sales and Profit for Third Quarter (Oct Dec, 217) of FY217 5 Construction, Mining & Utility Equipment: Sales advanced by 56.8% from the corresponding period a year ago, to JPY594.5 billion. Segment profit expanded by 16.% to JPY8.1 billion. Segment profit ratio improved by 3.2 points to 13.5%. Retail Finance: Revenues increased by 16.6% to JPY14.7 billion. Segment profit improved by 19.3% to JPY3. billion. Industrial Machinery & Others: Sales amounted tojpy42.3 billion, remaining about flat from the corresponding period a year ago. Segment profit expanded by 79.9% to JPY4.3 billion. Oct.-Dec.,216 Oct.-Dec.,217 Komatsu conventional Changes Review of three business segments Construction, Mining & Utility Equipment: Both sales and profit expanded, supported by advanced sales, especially in North America, China, Asia and Oceania, as well as the benefits of the new addition of KMC to consolidated accounting. Retail Finance: Both revenues and profit increased, mainly reflecting increased assets in North America. Industrial Machinery & Others Sales remained about flat from the corresponding period a year ago. Profit expanded, mainly supported by increased sales of machine tools to the automobile manufacturing industry. KMC Increase (decrease) % Change Net sales 43.5 646.8 561.4 85.3 +216.2 +5.2% Construction, mining & utility equipment Retail finance Industrial machinery & others [376.6] 379. [12.] 12.6 [41.9] 42.2 % : Profit ratio [ ]: Sales after elimination of inter-segment transactions [591.7] 594.5 [13.] 14.7 [41.9] 42.3 [56.4] 59.1 [13.] 14.7 [41.9] 42.3 [85.3] 85.3 - - [+215.1] +215.4 [+1.] +2. [(.)] +. Elimination (3.3) (4.7) (4.7) - (1.3) - [+57.1%] +56.8% [+8.9%] +16.6% [(.)%] +.2% Segment profit 1.1% 43.6 13.5% 87.1 14.7% 82.4 5.5% 4.6 +43.5 +99.9% Construction, mining & utility 1.3% 38.9 13.5% 8.1 14.8% 75.5 5.5% 4.6 +41.2 equipment 2.5 Retail finance 2.2% 2.6% 3. 2.6% 3. - +.4 2.3 Industrial machinery & others 4.3 4.3 - +1.9 5.7% 1.2% 1.2% Corporate & elimination (.2) (.4) (.4) - (.1) - +16.% +19.3% +79.9%
Sales to outside customers advanced by 57.1% from the corresponding period a year ago, to JPY591.7 billion. When KMC s sales are excluded, sales increased by 34.5% to JPY56.4 billion. Excluding those of KMC, sales improved in all regions except for Japan. Sales expanded sharply, especially in North America, China, Asia and Oceania. The ratio of sales in Strategic Markets increased to 54% of total sales. (The ratio of Strategic Market was also 54%, when KMC s sales were included.) YoY Comparison (Conventional) +2.5 +7.1 591.7 6 +37.2% +43.3% Oct.-Dec.,217 5% Africa 56.4 +25.3 55 2% Middle East (Conventional) Plus +5.1% 56.4 Oceania 9% Minus 5 Oct.-Dec.,216 376.6 Construction, Mining & Utility Equipment : Sales by Region (To Outside Customers) for Third Quarter (Oct Dec, 217) of FY217 (.4) (.5)% Japan North America Europe Latin America CIS China Asia Oceania Middle East Komatsu 78.6 117. 35.6 61.9 24.2 38.1 75.8 41.4 9.4 23.7 56.4 Conventional 15 Increase (decrease) (.4) +36.8 +9.4 +1.8 +6. +16.4 +25.3 +15.5 +2.5 +7.1 +129.7 1 KMC. 35. 4. 2.1 1.9 5.7 1.1 1.. 7.1 85.3 5 Oct.-Dec.,217 78.7 152.1 39.7 82. 26.2 43.8 76.9 51.5 9.5 3.9 591.7 Africa Oct.-Dec.,216 79.1 8.2 26.2 51. 18.2 21.7 5.5 25.8 6.9 16.5 376.6 Traditional Markets +6. +1.8 +33.4% +9.4 +21.2% +36.8 +35.9% +45.9% +16.4 +75.4% +15.5 +6.3% Strategic Markets +129.7 [+34.5%] Total 45 4 35 3 25 2 376.6 4% Africa 2% Middle East 7% Oceania Asia 13% 6% China 5% CIS Latin America 14% Europe 7% North America 21% Strategic Markets 51% Traditional Markets 49% 5% Africa 2% Middle East 8% Oceania 8% 5% Asia 15% China CIS Latin America 12% Europe 7% North America 23% Asia 13% China 7% 4% CIS Latin America Europe 7% North America Japan Japan Japan 21% 16% 13% Oct.-Dec., 216 Oct.-Dec., 217 (Conventional) Strategic Markets 54% Traditional Markets 46% 14% 26% Oct.-Dec., 217 (including KMC) 6 Strategic Markets 54% Traditional Markets 46%
Highlights of Business Results for Nine Months (Apr Dec, 217) of FY217 7 Consolidated net sales increased by 47.2% from the corresponding period a year ago, to JPY1,85.8 billion. Operating income advanced by 75.8% to JPY188.1 billion. Operating income ratio was 1.4%, up 1.7 percentage points. Net income attributable to Komatsu Ltd. expanded by 126.9% to JPY155. billion. Apr.-Dec.,216 Apr.-Dec.,217 Y-O-Y 16.5/USD 118.5/EUR 16./RMB 111.7/USD 128.2/EUR 16.6/RMB *1 Komatsu conventional KMC Increase (decrease) Change % Net sales 1,226.7 1,85.8 1,569.4 236.3 +579. +47.2 % Segment profit (loss) 17.8 2.8 216. (15.2) +93. +86.3 % Other operating income (expenses) (.8) (12.6) (12.7). (11.8) - Operating income (loss) 17. 188.1 23.3 (15.1) +81.1 +75.8% Profit ratio (loss ratio) 8.7% 1.4% 13.% (6.4)% +1.7pts. - Other income (expenses) (3.7) 27.1 +3.9 - Income before income taxes 13.2 215.3 +112. +18.5% Net income *3 68.3 155. +86.7 +126.9% *2 *2 *1 Figures represent those which KMC s business results are excluded. *2 KMC's segment loss and operating loss include the effects of temporary expenses shown on the right. *3 Upon adoption of ASC 81, Net income is equivalent to Net income attributable to Komatsu Ltd. Note: PPA stands for Purchase Price Allocation. It is an accounting process of valuating and allocating acquired assets and liabilities to fair prices. Depreciation after PPA (36.7) Start-up cost etc. (4.1) Total (4.8)
Segment Sales and Profits for Nine Months (Apr-Dec, 217) of FY217 8 Construction, Mining & Utility Equipment: Sales advanced by 53.9% from the corresponding period a year ago, to JPY1,658.9 billion. Segment profit expanded by 9.5% to JPY183.9 billion. Segment profit ratio improved by 2.1 points to 11.1%. Retail Finance: Revenues advanced by 27.3% to JPY45.9 billion. Segment profit expanded by 32.3% to JPY8.9 billion. Industrial Machinery & Others: Sales amounted to JPY121.4 billion, remaining about flat from the corresponding period a year ago. Segment profit improved by 41.7% to JPY9.1 billion. Apr.-Dec.,216 Apr.-Dec.,217 Komatsu conventional KMC Increase (decrease) Changes % Change Net sales 1,226.7 1,85.8 1,569.4 236.3 +579. +47.2% Construction, mining & utility equipment Retail finance Industrial machinery & others [1,71.9] 1,77.7 [34.3] 36.1 [12.4] 121.2 [1,648.6] 1,658.9 [36.7] 45.9 [12.4] 121.4 % : Profit ratio [ ]: Sales after elimination of inter-segment transactions [1,412.3] 1,422.6 [36.7] 45.9 [12.4] 121.4 [236.3] 236.3 - - [+576.7] +581.2 [+2.4] +9.8 [(.)] +.2 Elimination (8.3) (2.6) (2.6) - (12.2) - [+53.8%] +53.9% [+7.2%] +27.3% [(.1)%] +.2% Segment profit 8.8% 17.8 11.1% 2.8 13.8% 216. (6.4)% (15.2) +93. +86.3% Construction, mining & utility 9.% 96.5 11.1% 183.9 14.% 199.1 (6.4)% (15.2) +87.4 equipment Retail finance 18.7% 6.7 19.5% 8.9 19.5% 8.9 - +2.1 Industrial machinery & others 6.4 9.1 9.1 - +2.6 5.3% 7.5% 7.5% Corporate & elimination (1.9) (1.1) (1.1) - +.7 - +9.5% +32.3% +41.7% Review of three business segments Construction, Mining & Utility Equipment: Sales expanded, supported by increased sales of construction equipment, centering on North America, China and Asia as well as the benefits of the new addition of KMC to consolidated accounting. With respect to profits, while KMC recorded an operating loss, impacted by its temporary expenses, Komatsu (excluding KMC) expanded profit. As a result, segment profit increased sharply as a whole from the corresponding period a year ago. Retail Finance: Revenues increased, mainly supported by increased assets in North America. Segment profit also improved, reflecting no more adverse effects of allowance for doubtful accounts recorded in China for the corresponding period a year ago. Industrial Machinery & Others: Sales remained about flat from corresponding period a year ago. Profit improved, supported by increased sales of machine tools to the automobile manufacturing industry.
Construction, Mining & Utility Equipment : Sales by Region (To Outside Customers) for Nine Months (Apr-Dec, 217) of FY217 Sales to outside customers advanced by 53.8% from the corresponding period a year ago, to JPY1,648.6 billion. When KMC s sales are excluded, sales increased by 31.8% to JPY1,412.3 billion. Excluding those of KMC, sales improved in all regions. Sales expanded sharply, especially in North America, China and Asia. The ratio of sales in Strategic Markets increased to 54% of total sales. (The ratio of Strategic Market was also 54%, when KMC s sales were included.) YoY Comparison (Conventional) +31.8 +3.6 +2.9 1,8 Apr.-Dec.,217 +43.% +15.6% +44.5% 1,412.3 +76. 1,7 (Conventional) +58.% 1,6 Plus +43.8 +75.8% 1,5 Minus +27.2 1,4 +56.3 % +31.5 1,3 +21.6 +21.6% +34.4 +64.7 +23.7% [+31.8%] 1,2 +27.5% 1,1 +18.7 1, +8.7% Apr.-Dec.,216 9 1,71.9 8 North Japan America Europe Latin CIS China Asia Oceania Middle Africa Total America East 7 Apr.-Dec.,216 216.5 235.7 91.5 146.1 48.5 57.9 131. 74. 23.2 47. 1,71.9 6 Komatsu 5 235.2 3.5 113.2 177.6 75.8 11.7 27.1 15.9 26.9 67.9 1,412.3 Conventional 4 Increase (decrease) +18.7 +64.7 +21.6 +31.5 +27.2 +43.8 +76. +31.8 +3.6 +2.9 +34.4 3 KMC. 99. 11.1 54.4 3.7 12.1 2.9 3.7.1 21.9 236.3 2 Apr.-Dec.,217 235.2 399.6 124.4 232.1 79.5 113.9 21. 136.6 27. 89.9 1,648.6 Traditional Markets Strategic Markets 1 1,71.9 1,412.3 5% Africa 2% Middle East 8% Oceania Asia 4% Africa 15% 2% Middle East 7% Oceania 7% China Asia Strategic 5% CIS 12% Markets 5% China 49% Latin America 5% CIS 13% Latin America Europe 14% 8% Europe 9% North North Traditional America America Markets 21% 22% 51% Asia 7% China CIS Latin America 14% Europe 8% North America Japan Japan Japan 2% 17% 14% Apr.-Dec., 216 Apr.-Dec., 217 (Conventional) 5% Africa 2% Middle East 8% Oceania Strategic Markets 54% Traditional Markets 46% 1,648.6 5% 13% 24% Apr.-Dec., 217 (including KMC) 9 Strategic Markets 54% Traditional Markets 46%
Construction, Mining & Utility Equipment : Causes of Difference in Sales and Segment Profit for Nine Months (Apr-Dec, 217) of FY217 1 Sales increased by JPY581.2 billion from the corresponding period a year ago, supported by increased volume of sales, the positive factor of foreign exchange rates and the benefits of the new addition of KMC to consolidated accounting. Although segment profit was adversely affected by temporary expenses of KMC, it increased by JPY87.4 billion as a whole. Segment profit ratio improved by 2.1 points to 11.1%. Billions of yen 1,7 1,5 1,3 1,1 9 7 5 3 1,77.7 Apr.-Dec., 216 16.5/USD 118.5/EUR 16./RMB Sales Apr.-Dec., 216 vs. Apr.-Dec., 217 Volume +265.2 Selling price +5.6 *1 New additions to consolidation Foreign +243.5 exchange rate +66.9 +581.2 billion yen Positive factors Negative factor *1: Including JPY236.3 billion resulting from the new addition of KMC to consolidated accounting 1,658.9 Apr.-Dec., 217 111.7/USD 128.2/EUR 16.6/RMB Billions of yen 2 18 16 14 12 1 8 6 4 2 96.5 Apr.-Dec., 216 9.% Segment profit Apr.-Dec., 216 vs. Apr.-Dec., 217 Volume, product mix, etc. +95.2 Fixed costs (1.5) Selling price +5.6 +87.4 billion yen Foreign exchange rate +3. Positive factors Negative factor Segment profit ratio *2 New additions to consolidation (14.9) 183.9 Apr.-Dec., 217 11.1% *2: Including JPY(15.2) billion resulting from the new addition of KMC to consolidated accounting.
Construction, Mining & Utility Equipment: KMC s Business Results for Nine Months (Apr-Dec, 217) of FY217 KMC 11 Sales increased by 2.7% from the corresponding period a year ago, to JPY236.3 billion. Excluding temporary expenses, operating income was JPY25.6 billion. When the temporary expenses of JPY4.8 billion were included, KMC recorded an operating loss of JPY15.1 billion. Apr.-Dec.,216 (Reference) 16.5/USD *1 Apr.-Dec.,217 111.7/USD Increase (decrease) Changes (Reference) % Change Net sales 195.8 236.3 +4.4 +2.7% Equipment 41.3 46.4 +5.1 +12.4% Parts 7.8 85.4 +14.6 +2.6% Service etc. 83.6 14.4 +2.8 +24.9% Operating income (loss) <excluding Temporary Expenses> 5.4% 1.4 1.9% 25.6 +15.2 +145.6% Temporary Expenses (negative figure) (9.3) (4.8) (31.4) - Depreciation after PPA *2 - *3 (36.7) (36.7) - Start-up expenses etc. (9.3) (4.1) +5.2 - Operating income (loss) <including Temporary Expenses>.6% 1. (6.4)% (15.1) (16.2) - * 1: Figures for the corresponding period a year ago (April - Dec 216) are rearranged for Komatsu s fiscal year for your reference. * 2: PPA stands for Purchase Price Allocation. It is an accounting process of valuating and allocating acquired assets and liabilities to fair prices. * 3: Including JPY(25.8) billion for inventories after PPA. KMC wrote off all inventories in the first half period. Sales & Operating Income Ratio Sales by segments Sales by regions (To Outside Customers)Apr.-Dec.,217 Millions of USD Billions of JPY Surface Equipment Africa 3,5 1.9% Underground 9% 3, 2,5 2, 1,5 1, 5 5.4% 2,117 1,838 387 415 665 764 785 936 Apr-Dec Apr-Dec FY16 FY17 1.9% 5.4% 236.3 195.8 46.4 41.3 85.4 7.8 83.6 14.4 Apr-Dec Apr-Dec FY16 FY17 Parts -5.% Service etc. Operating income ratio(excluding temporary expense) 51 % 49 % Apr.-Dec.,216 露天掘り 5% 坑内掘り 5% Apr.-Dec.,217 Asia 1% China 5% CIS 2% Oceania 13% 236.3 Latin America 23% Europe 5% North America 42%
Retail Finance: Assets, Revenues and Segment Profit for Nine Months (Apr-Dec, 217) of FY217 12 Assets increased, mainly due to increased financing contracts, centering on North America. Segment profit improved, mainly supported by no more adverse effects of allowance for doubtful accounts recorded in China for the corresponding period a year ago. 8 7 6 5 4 3 2 1 Assets Mar 31, 217 vs. Dec 31, 217 671.5 North America Others Oceania China Europe Japan 112.2/USD 119.8/EUR 16.3/RMB 746.5 North America Others Oceania China Europe Japan Mar 31, 217 Dec 31, 217 113./USD 134.9/EUR 17.3/RMB 217/3E 217/12E Changes Interest-bearing debt 56. 566.7 +6.7 Interest-bearing debt, net 51.2 559.7 +58.4 Net D/E ratio 3.65 3.77 +.12pts. 55 5 45 4 35 3 25 2 15 1 5 Revenues Apr.-Dec., 216 vs. Apr.-Dec., 217 Sales Segment profit 36.1 16.5/USD 118.5/EUR 16./RMB 6.7 Apr.-Dec., 216 45.9 111.7/USD 128.2/EUR 16.6/RMB 8.9 Apr.-Dec., 217
Industrial Machinery & Others: Sales and Segment Profit for Nine Months (Apr-Dec, 217) of FY217 13 Sales remained about flat at JPY121.4 billion from the corresponding period a year ago. Segment profit increased, mainly due to increased sales of machine tools to the automobile manufacturing industry. Segment profit ratio was 7.5%. Billions of yen 15 1 5 121.2 Breakdown of sales Apr.-Dec., 216 Apr.-Dec., 217 Increase (decrease) Changes % change Komatsu Industries Corp., etc. [total of press and sheet-metal machines] 36.5 32.7 (3.7) (1.3)% Komatsu NTC Ltd. [represented by wire saws] Sales 121.4 Apr.-Dec., 216 Apr.-Dec., 217 33.5 [8.6] Billions of yen 43.2 [4.8] +9.7 [(3.7)] Segment profit :Segment profit ratio +29.1% [(43.6)%] Gigaphoton 23.3 27.2 +3.8 +16.3% Others 27.8 18.3 (9.5) (34.4)% Total 121.2 121.4 +.2 +.2% 15 1 5 5.3% 6.4 7.5% 9.1 Apr.-Dec., 216 Apr.-Dec., 217 (%) 1 5-5 -1-15
Consolidated Balance Sheets 14 Total assets grew by JPY83.5 billion from the previous fiscal year-end, affected by the new addition of KMC to consolidated accounting and increased inventories. Interest-bearing debt increased by JPY476. billion to JPY884.7 billion, mainly affected by the acquisition of KMC. Komatsu Ltd. shareholders equity ratio declined by 1.7 points to 48.7%. Mar. 31, 217 Dec. 31, 217 112.2/USD 113./USD 119.8/EUR 134.9/EUR 16.3/RMB 17.3/RMB Increase (decrease) Cash & deposits (incl. time deposits) [a] 122.1 167.7 +45.6 Accounts receivable (incl. long-term trade receivables) 933.2 1,139. +25.8 Inventories 533.8 757.4 +223.5 Tangible fixed assets 679. 767.8 +88.8 Other assets 388.1 627.8 +239.6 Total assets 2,656.4 3,459.9 +83.5 Accounts payable 24.1 33.3 +63.2 Interest-bearing debt [b] 48.7 884.7 +476. Other liabilities 359.1 55.3 +146.2 Total liabilities 1,7.9 1,693.4 +685.4 [Shareholders equity ratio] [59.4%] [48.7%] [ (1.7)pts. ] Komatsu Ltd. shareholders equity 1,576.6 1,684.9 +18.2 Non-controlling interests 71.8 81.5 +9.7 Dec 31, 217 Affect of new addition of KMC to consolidation 23.5 85.8 114.4 84.8 278.6 587.2 31.9 128.3 18. 268.2 Liabilities & Equity 2,656.4 3,459.9 +83.5 Interest-bearing debt, net [b-a] 286.5 716.4 +43.4 Net D/E ratio.18.43
Ⅱ. Outlook of FY217 Business Results 15
FY216 Results(A) FY217 Projection (B) (Current) Komatsu conventional *1 KMC FY217 Projection (C) (Initial) 15./USD 115./EUR 15./RMB Komatsu conventional *1 KMC Increase (decrease) Changes (B-A) Net sales 1,82.9 2,328. 2,37. 291. 2,135. 1,88. 256. +525. +29.1% Segment profit (loss) 176.5 236. 256. *2 (2.) 164. 23. *2 (39.) +59.4 +33.7% Other operating income (expenses) 18.6/USD 119.3/EUR 16.2/RMB Outline of Projection for FY217 For the nine-month period of FY217, consolidated net sales and profits are better than our projection of October 217, and we believe this condition will continue in the fourth quarter. However, we are not changing the projection for full-year business results, as we consider such factors as foreign exchange rates and the post-chinese New Year demand. (See below for the projection of October.) 18./USD 124.4/EUR 16./RMB (2.4) (2.) (2.) - (8.) (8.) - (17.5) - *2 Operating income (loss) 174. 216. 236. (2.) 156. 195. *2 (39.) +41.9 +24.1% Profit ratio (loss ratio) 9.7% 9.3% 11.6% (6.9)% 7.3% 1.4% (15.2)% (.4)pts. - Other income (expenses) (7.6) 21. (15.) +28.6 - Income before income taxes 166.4 237. 141. +7.5 +42.4% Net income *3 113.3 159. 92. +45.6 +4.2% ROE 7.3% 1.1% 5.9% +2.8pts. Cash dividends per share 58yen 72yen 58yen +14yen Change % 16 Consolidated payout ratio 48.2% 42.7% 59.5% Notes 1) Figures represent those which KMC s business results are excluded 2) KMC s segment and operating losses include temporary expenses in the table on the right. 3) Upon adoption of ASC 81, Net income is equivalent to Net income attributable to Komatsu Ltd. FY217 Projection(Current) FY217 Projection(Initial) Depreciation after PPA * (4.) (39.) Start-up expenses, etc. (6.) (9.) Total (46.) (48.) Note: PPA stands for Purchase Price Allocation. It is an accounting process of valuating and allocating acquired assets and liabilities to fair prices.
Komatsu (Conventional) Construction, Mining & Utility Equipment: Actual and Projected Demand for 7 Major Products 17 In the third quarter and nine-month period, demand increased by 27% each from the corresponding period a year ago. Quarterly demand has been increasing year on year. We anticipate that this trend will continue in North America and other regions in the fourth quarter. With respect to full-year demand, we are not changing our projection of October last year. Units 6, 5, 4, 3, 2, 1, Index +13% Annual demand for 7 major products +15% 1 Japan Europe Others :FY7=1 8-2%-2% 64 92 +45% 4% FY16: +4% FY17:+8% +13% (Projection of Oct. 217) FY17:+/-% +5% (Initial Projection) 2% 97 +5% -7% 9 +3% 93 N.America China Y-O-Y growth rate -9% -14% 84 72 +4% 76 Growth rate 6% % -2% -4% 15, 12, 9, 6, 3, Units Quarterly demand for 7 major products Japan Europe Others +8% +2% +7% -3% -5% -8% -4%-9% -19%-16% -18% -11% Growth rate N.America 12% China Y-O-Y growth rate 9% : +27% Apr.-Dec: +27% +3% -7% -1% +24% +27% +28% +27% 6% 3% % -3% -6% -9% -12% -15% -6% FY6 FY7 FY8 FY9 FY1 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY17 (As of Oct.217) (Initial) Projection Note: Estimated by Komatsu FY17/ FY17/ FY17/1Q FY16/ FY16/ FY16/ FY16/1Q FY15/ FY15/ FY15/ FY15/1Q FY14/ FY14/ FY14/ FY14/1Q FY13/ FY13/ FY13/ FY13/1Q -18%
Komatsu (Conventional) Construction, Mining & Utility Equipment : Demand in Major Markets (1) Japan 18 For the third quarter period of FY217, demand decreased by 3% from the corresponding period a year ago. Demand for new equipment declined, mainly due to the reactionary drop of pre-buy demand triggered by Japanese emission controls (effective September 217). Demand for new equipment (7 major products) and construction investment Quarterly demand for 7 major products Construction investment Trillion of yen FY16: -4% FY17:+/-% +5% (Projection of Oct. 217) FY17:+/-% +5% (Initial Projection) Demand for new equipment/ Export of used equipment (Units) Y-O-Y growth rate 1% 75% 128 Demand (units) Y-o-Y change (%) 14 9 82 79 Units 16, 12, 1 9 8 7 6 5 4 3 2 1 Exports of used equipment 間 住宅 間住宅 政府 Demand for new equipment Private-sector residential Private-sector non-residential Government construction FY98 FY99 FY FY1 FY2 FY3 FY4 FY5 FY6 FY7 FY8 FY9 FY1 FY11 FY12 FY13 FY14 FY15 FY16 FY17 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 8 6 4 2 2 5% 25% % -25% -5% -75% -1% 4 Units 12, 6 8 8, 1 4, Index FY13/1Q FY13/1Q :FY7/=1 FY14/1Q FY14/1Q FY15/1Q FY15/1Q FY16/1Q FY16/1Q FY17/1Q Rental companies Regular customers : -3% Apr.-Dec: +2% FY17/1Q 8, 4, +3% +3% -4, -8, -12, -16, Quarterly demand for hydraulic excavators (Rental & regular uses) Y-O-Y growth rate Rental Regular
Komatsu Conventional: (Conventional) w/o KMC Construction, Mining & Utility Equipment : Demand in Major Markets (2) North America 19 In the third quarter period of FY217, demand increased by 24% from the corresponding period a year ago. In the United States, demand remained steady, centering on the infrastructure development and energy-related sectors. In the rental industry, demand increased after having been sluggish. Quarterly demand has been increasing year-on-year. We anticipate that this trend will continue in the fourth quarter. Demand for 7 major products and US housing starts Quarterly demand for 7 major products Demand for 7 major products (Units) 8, 6, FY16: -11% FY17:+/-% +5% (Projection of Oct. 217) FY17:+/-% +5% (Initial 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 (%) 99 112 17 :FY7/=1 93 114 : +24% Apr.-Dec: +14% Units 3, 2, 1, -1, -2, -3, 4, 2, FY4 FY5 FY6 FY7 FY8 FY9 FY1 (As of Oct.217) (Initial) [Source]: Demand for 7 major products estimated by Komatsu Projection FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY17 USA Canada 1% 8% 6% 4% 2% % FY7 FY13/1Q FY8 Rental-distributor (DORF) FY9 FY14/1Q FY1 FY11 Rental -Regular FY12 FY15/1Q Breakdown of demand by segment (Unit basis) FY13 FY14 FY15 FY16/1Q FY16 FY16/4-12 FY17/4-12 FY17/1Q Y-O-Y growth rate Rental +13% Mining & energy +27% Others +12% Mining & energy Road Construction Others
Komatsu Conventional: (Conventional) w/o KMC Construction, Mining Equipment and Utility : Demand in Major Markets (3) Europe 2 In the third quarter period of FY217, European demand increased by 3% from the corresponding period a year ago. Demand remained steady, centering on a major market of Germany. Units 8, 7, Annual demand for 7 major products FY16: +11% FY17:+/-% +5% (Projection of Oct. 217) FY17:+/-% +5% (Initial Projection) Y-O-Y growth rate 6% 4% Quarterly demand for 7 major products Demand (units) Y-o-Y change (%) 45 48 52 57 59 Units 15, 1, 2% 5, 6, % 5, -2% -4% Index :FY7/=1 : +3% Apr.-Dec: +6% (5,) (1,) 4, FY13/1Q FY14/1Q FY15/1Q FY16/1Q FY17/1Q 3, Units Region demand for 7 major products (Excl. 6t class) 2, 1, 5, 4, Southern Eastern Other Western Countries Northern The UK., France, and Germany 3, 25, FY7 FY8 FY9 FY1 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY17 (As of Oct.217)(Initial) Projection 3, 2, 1, 2, 15, 1, 5, [Source]: Demand for 7 major products estimated by Komatsu FY8 FY9 FY1 FY11 FY12 FY13 FY14 FY15 FY16 FY16 FY17 (Apr.-Nov.) (Apr.-Nov.)
Komatsu Conventional: (Conventional) w/o KMC Construction, Mining & Utility Equipment : Demand in Major Markets (4) China 21 In the third quarter period of FY217, demand expanded by 99% from the corresponding period a year ago. Demand for construction equipment is growing, supported by growing construction projects for infrastructure development. Units 12, 1, Annual demand for 7 major products (Foreign makers) 8, FY16: +55% FY17:+4% +5%(Projection of Oct. 217) FY17:+5% +1%(Initial Projection) Y-O-Y growth rate 15% 1% 5% Quarterly demand for 7 major products (Foreign makers) 11 Demand (units) 64 Y-O-Y growth rate 39 71 Units 14 3, 2, 1, 6, 4, 2, 1 5 FY3 FY4 FY5 FY6 FY7 FY8 FY9 KOMTRAX in China : Average operating hours per month Hours 2 Operating hours (left scale) 83% Y-o-Y (right scale) 15 FY1 29% 14% 6% 1% 3% 6%1%12%-2% 17%9% -8% -13% -8% -16% -15% -1% -8% -1% -7% -14% 3% 1% 6% 7% 6% 2% 8% % 2% -2% -25% FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY17 (As of Oct.217) (Initial) Projection % -5% -1% FY13/1Q Units 15, Index :FY7/=1 FY14/1Q FY15/1Q FY213 FY16/1Q FY17/1Q Monthly demand for hydraulic excavators : Total of 6-ton and larger models <Chinese New Year> : Jan. 31, 214 : Feb. 19, 215 : Feb. 8, 216 : Jan. 28, 217 :Feb. 16. 218 : +99% Apr.-Dec: +111% -1, -2, 8% FY214 6% 1, FY215 4% FY216 2% FY217 % -2% 5, -4% -6% -8% 4 5 6 7 8 9 1 11 12 1 2 3 [Source]: Demand for 7 major products and hydraulic excavators estimated by Komatsu (month)
Komatsu (Conventional) Construction, Mining & Utility Equipment : Demand in Major Markets (5) Southeast Asia 22 In the third quarter period of FY217, demand advanced by 27% from the corresponding period a year ago. Especially, demand for mining equipment has increased sharply in Indonesia, the largest market of Southeast Asia. Units 4, Indonesia Others Malaysia Annual demand for 7 major products FY16: +1% FY17:+15% +2% (Projection of Oct. 217) FY17:+/-% +5%(Initial Projection) Y-O-Y growth rate 12% 8% 151 Quarterly demand for 7 major products Indonesia Others Malaysia Thailand Y-o-Y change (%) 123 17 123 156 Units 9, 6, 3, Thailand 4% % 3, -4% -8% Index : FY7/=1 : +27% Apr.-Dec: +28% -3, : -6, 2, FY13/1Q FY14/1Q FY15/1Q FY16/1Q FY17/1Q 1, Units 6 5 4 3 Indonesia: Demand for construction & mining equipment by industrial sector : +63% Apr.-Dec: +71% Forestry Agriculture Construction Mining 2 FY4FY5FY6FY7FY8FY9FY1FY11FY12FY13FY14FY15FY16FY17FY17 (As of Oct.217) (Initial) Projection [Source]: Demand for 7 major products estimated by Komatsu 1 FY12/1Q FY13/1Q FY14/1Q FY15/1Q FY16/1Q FY171Q
Komatsu (Conventional) Construction, Mining Equipment and Utility : Actual and Projected Demand for Mining Equipment 23 In the third quarter period of FY217, global demand increased by 5% from the corresponding period a year ago. Demand continues to advance, centering on Indonesia. Concerning full-year demand, we are not changing our projection of October last year. Annual demand for mining equipment Quarterly demand for mining equipment Dump trucks: 75 tons (HD785) and larger Bulldozers: 525HP (D375) and larger Wheel loaders: 81HP (WA8) and larger Motor graders: 28HP (GD825) and larger Excavators: 2 tons (PC2) and larger Units Units 1, +51% +39% +15% 8, +6% -5% 6, 4, FY16: -2% FY17:+4% +5% (Projection of Oct. 217) FY17:+1% +2% (Initial Projection) -34% -25% -15% -3% -51% Y-o-Y change 1% 5% % -5% -1% -15% -2% Middle East & Africa Oceania Asia Japan&China Europe&CIS Latin America N. America 2, 1,5 : +5% Apr.-Dec: +65% -22% -2% -15% -45% -26% -54% -24% -33% -55% -49% 1, -12% -2% -33% +17% -7% +96% +12% Y-o-Y change 1% +59% 5% +5% % -5% -1% Middle East & Africa Oceania Asia Japan&China Europe&CIS Latin America N. America -25% Y-o-Y change 5-15% Y-o-Y change 2, -3% -35% -2% FY7 FY8 FY9 FY1 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY17-4% (As of Oct.217) (Initial) Projection Note: Demand estimated by Komatsu FY17/1Q FY16/1Q FY15/1Q FY14/1Q FY13/1Q -25%
Construction, Mining & Utility Equipment : Sales of Mining Equipment 24 For the third quarter period of FY217, sales expanded by 132% from the corresponding period a year ago, to JPY252.2 billion. When KMC s sales are excluded, sales advanced by 53% to JPY166.9 billion. When the effects of KMC are excluded, sales of equipment, parts and service advanced, supported by growing demand in Indonesia and some other countries. 1,2 1, 8 6 4 2 Annual sales of mining equipment (incl. parts and service, etc.) 361.5 +33% +15% +11% -14% 417. FY9 554. FY1 FY11 KMC Oceania Japan & China Latin America Y-o-Y change(including KMC) 614.5 FY12-18% -1% -3% -1% 731.6 56.3 555. 499.3 447.3 475.6 433.6 FY13 FY14 FY15 FY16 +95% +28% 846. FY17 FY17 +69% +1% (As of Oct.217) (Initial) Projection 56.4 15.1 52.5 222.2-15% 26.8 178.2 144.6 14.6-2% 196.1 22.4 234.6 216.2 214.9 96.3 91.7 86.6 98.3 81.3 FY14 FY15 Middle East & Africa Asia Europe & CIS N. America 1% 5% % -5% 93.2 129.5-1% 11.4 FY16 FY17 Y-o-Y change Y-o-Y change(conventional) FY17 (As of Oct.217) (Initial) Projection Equipment (KMC) Parts Service, etc (KMC) (KMC) Equipment (conventional) Parts (conventional) -25% Service, etc (conventional) -3% Quarterly sales of mining equipment (incl. parts and service, etc.) Latin America N. America Y-o-Y change(including KMC) Y-o-Y change Y-o-Y change(conventional) +145% 3 15% +115% +132% 1% +6% +4% 25 +53% +2% +26% 19.8 5% 252.2 -% -4% -12% -4% -15% 211.1 222.3 12.5 29.6 % 14.1 2-7% -13% -7% -18% -18% 26.8 28.9-5% 166.9 35.8 145.3 35.4-1% 15 13.8 137.2 33.1 12.9 128.8 135.8-15% 115.9 73.3 118.7 11.1 113.7 5.4 17.5 18.9 53.4-2% 1 98.3 47.4 9.7 34.4 33.2 26.6-25% 65.9 6.2 65.8-3% 5 5.7 45.7 45.8 58.8-35% 19.4 23.8 31. 27.6 18.3 25.1 26.2-4% FY14/1Q KMC Oceania Japan & China FY15/1Q FY16/1Q FY17/1Q Middle East & Africa Asia Europe & CIS FY16/1Q FY17/1Q Equipment (KMC) Parts (KMC) Service, etc (KMC) Equipment (conventional) Parts (conventional) Service, etc (conventional)
Construction, Mining & Utility Equipment : Sales of Parts 25 For the third quarter period of 217, sales of parts increased by 56% to JPY146.1 billion from the corresponding period a year ago. When KMC s sales are excluded, sales of parts advanced by 24% to JPY116.5 billion. Sales advanced as a result of capturing demand for aftermarket products. Billions of yen 8 7 6 5 4 3 2 1 KMC Annual sales of parts Construction equipment Mining equipment YonY(including KMC) YonY(conventional Komatsu) Y-o-Y change (%) +41% +29% +18% +13% +14% +13% 2% +6% +2% +3% +5% % 532.9 +1% -5% 49.2-1% 15.1-2% 93.2 387.2 397.5 427.8 397. 363.7 378.8-4% 319.5 317. 193.2 28. 176.3 191.1 182.6 18.8 259.5 265. 176.5-6% 238. 141.5 159. 148. 154.5 152. -8% 12. 187.4 214.9 158. 234.6 15. 113. 118. 171.5 196.1 22.4 216.2 138.5 FY7 FY8 FY9 FY1 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY17 (As of Oct.217) (Initial) Projection 4% -1% -12% Billions of yen 2 18 16 14 12 1 8 6 4 2-3% +14% +11% +11% +5% +7%+1% 12.9 1. 12.1 91.6 92.8 98.8 11.3 95.3 87.8-7% +15% 47.2 44.4 49.2 44.9 42. 45.7 49.8 46.1 46.4 42.1 43. Y-o-Y change (%) +66% 8% +54% +56% 6% +33% +23% +24% 135. 145.7 146.1 29.6 28.9 26.8-7% -11% -14% 116.7 116.5-2% 19.5 18.2-4% 93.8 87.8-6% 5.9 49.3 5.6 49.4 53.1 6.2 65.8 65.9 45.8 5.8 54.9 56.9 5.4 58.8 52.7 46.4 45.745.8 5.7 FY14/1Q Quarterly sales of parts KMC Construction equipment Mining equipment YonY(including KMC) YonY(conventional Komatsu) FY15/1Q FY16/1Q FY17/1Q 4% 2% % -8% -1% -12% -14% -16% -18%
Appendix 26
<Appendix> Quarterly Sales and Operating Income 27 8 7 6 5 4 3 2 1 KMC Industrial Machinery & Others Retail Finance Construction, Mining & Utility Equipment(Komatsu conventional) Elimination 542. 46.2 482.3 494. 65.6 43.3 59. 53.5 15.2 12.9 13.6 11.7 411.8 416.7 433.8 467.3 Quarterly sales (since FY214) 446.1 446.3 44.7 56. 13.8 13.5 478. 484.4 53.6 65.7 13.4 13.1 392.3 38.5 417.4 411.6 43.5 389.2 46.8 42.2 34.7 44.2 11.8 11.6 12.6 345.1 353.4 379. 646.8 597.7 576.2 561.2 85.3 69.7 76.9 73.9 42.3 4.5 14.7 12.9 38.6 13.6 17.5 498.8 441. 472.4 59.1-1.2-5.2-6.2-4.5-4.8-3.6-6.5-6.1-2.5-2.4-3.3-5.3-1. -5.8-4.7 Exchange -1 FY14/1Q FY15/1Q FY16/1Q FY17/1Q rates 14/1Q 14/ 14/ 14/ 15/1Q 15/ 15/ 15/ 16/1Q 16/ 16/ 16/ 17/1Q 17/ 17/ 17/ /USD 12.5 12.8 114.1 119.2 121.3 122.6 121.2 118. 19.8 12.9 16.9 114.7 111.2 11.9 113. /EUR 14.9 137.7 142.8 136.9 133. 136.2 132.3 128. 124.3 114.6 116.7 121.4 121.6 129.9 133.2 /RMB 16.4 16.6 18.5 19. 19.6 19.5 19. 17.9 16.9 15.4 15.7 16.7 16.3 16.6 17. 15 1 5 Quarterly operating income(since FY214) Operating profit (KMC) Operating profit ratio (including KMC) 13.8% 12.9% 11.4% 11.1% 11.1% 11.% 11.6% 11.1% 1.% 63.4 62.1 56.2 6.1 55.6 53.9 49.7 49.3 7.7% 8.4% 42.8 29.7 34.3 Operating profit (Komatsu conventional) Operating profit ratio (Komatsu conventional) 13.4% 11.6% 12.9% 12.6% 1.1% 9.3% 11.7% 67. 75.5 52.4 6.2-5 FY14/1Q FY15/1Q FY16/1Q FY17/1Q
<Appendix> Construction, Mining & Utility Equipment: Quarterly Sales and Segment Profit 28 6 5 4 3 2 1 /USD /EUR /RMB Quarterly Sales 411.8 416.7 433.8 467.3 KMC Komatsu conventional 515. 549.3 498.8 392.3 38.5 417.4 411.6 76.9 345.1 353.4 379. 73.9 594.5 85.3 441. 472.4 59.1 FY14/1Q FY15/1Q FY16/1Q FY17/1Q Exchange rates 14/1Q 14/ 14/ 14/ 15/1Q 15/ 15/ 15/ 16/1Q 16/ 16/ 16/ 17/1Q 17/ 17/ 17/ 12.5 12.8 114.1 119.2 14.9 137.7 142.8 136.9 16.4 16.6 18.5 19. 121.3 122.6 121.2 118. 133. 136.2 132.3 128. 19.6 19.5 19. 17.9 19.8 12.9 16.9 114.7 124.3 114.6 116.7 121.4 16.9 15.4 15.7 16.7 111.2 11.9 113. 121.6 129.9 133.2 16.3 16.6 17. 1 5 Quarterly segment profit Segment profit (KMC) Segment profit (Komatsu conventional) Segment profit ratio (including KMC) Segment profit ratio (Komatsu conventional) Percentage of sales in Strategic Markets 6% 55% 53% 51% 54% 48% 47% 45% 5% 47% 51% 53% 55% 54% 52% 53.2 65.1 55.1 47.9 55.7 8.1 51. 51.6 42.4 4.7 41.4 44.3 26.3 31.2 38.9 13.8% 13.3% 14.8% 12.9% 13.2% 11.8% 11.% 1.8% 1.7% 9.9% 1.8% 7.6% 8.8% 1.3% 13.1% 1.2% 13.5% 9.3% FY14/1Q FY15/1Q FY16/1Q FY17/1Q Breakdown (5) of sales(%) 1% Parts, etc Mining equipment Construction equipment(stragegic Markets) Construction equipment(traditional Markets) 8% 48% 49% 51% 48% 53% 55% 55% 48% 52% 52% 53% 45% 57% 55% 53% 6% 13% 12% 12% 11% 9% 1% 4% 1% 9% 8% 1% 8% 9% 22% 18% 16% 17% 14% 15% 13% 13% 15% 15% 15% 19% 12% 12% 16% 13% 12% 2% 12% 17% 21% 21% 24% 22% 23% 23% 29% 23% 25% 22% 25% 18% 21% 19% % FY14/1Q FY15/1Q FY16/1Q FY17/1Q
<Appendix> Construction, Mining & Utility Equipment: Quarterly Sales by Region (To Outside Customers) 29 *1 including KMC *1 591.7 6 *1 3.9 545.8 9.5 *1 51.9 31. 51.5 494.4 1.1 5 27.8 464.2 24.8 7.4 4. 12.5 45.1 76.9 429.4 29.1 413.5 48.4 31.5 44.1 18.8 412.1 68.9 28.3 4 25. 29.3 388.9 378. 11.3 17.5 64.1 43.8 29.3 2.8 376.6 14.8 14.6 75.5 31.5 23.7 12.7 31.7 15.7 2.3 56.3 26.9 26.2 34.1 26.2 343.4 351.8 16.5 17.2 14. 6.9 25.6 34.7 38.3 51.3 25.6 28.1 47.9 21.6 42.4 15.4 14.9 7.1 25.8 39.4 48. 9.1 24.1 27.6 82. 3 54.9 22.6 11.9 24. 52.6 46.5 16.4 21.4 5.5 22. 77.8 25.2 14.3 13.1 11.2 4.3 4.2 13.6 7.3 56.8 72.2 33.4 18.6 13.1 21.7 11.5 11.7 58.2 5. 17.3 18.7 39.7 68.5 14.7 18.2 41.6 14.3 64.7 48.3 15.6 4.4 58.4 3.7 38.4 46 51 43.9 2 43. 6.1 49. 32.2 33.7 32.7 29.5 26.2 37.5 35.8 131.4 152.1 39.3 76.6 1.7 15.1 16.2 12.6 68.6 82.9 79.8 8.2 116. 1 75.8 56.8 75.6 85.2 92.3 85.2 65.3 67.5 8. 81.2 78.8 77.7 79.1 84.9 87.4 59.6 69.1 78.7 FY14/1Q FY15/1Q FY16/1Q FY17/1Q Africa Middle East Oceania Asia China CIS Latin America Europe North America Japan Exchange 14/1Q 14/ 14/ 14/ 15/1Q 15/ 15/ 15/ 16/1Q 16/ 16/ 16/ 17/1Q 17/ 17/ 17/ /USD 12.5 12.8 114.1 119.2 121.3 122.6 121.2 118. 19.8 12.9 16.9 114.7 111.2 11.9 113. /EUR 14.9 137.7 142.8 136.9 133. 136.2 132.3 128. 124.3 114.6 116.7 121.4 121.6 129.9 133.2 /RMB 16.4 16.6 18.5 19. 19.6 19.5 19. 17.9 16.9 15.4 15.7 16.7 16.3 16.6 17.
<Appendix> Retail Finance: Quarterly Sales and Segment Profit 3 2 18 17.5 16 15.2 14.7 12.9 13.6 13.8 13.5 13.6 14 13.4 13.1 11.8 12.6 12.9 11.7 11.6 12 1 8 6 4 2 FY14/1Q FY15/1Q FY16/1Q FY17/1Q Exchange rates 14/1Q 14/ 14/ 14/ 15/1Q 15/ 15/ 15/ 16/1Q 16/ 16/ 16/ 17/1Q 17/ 17/ 17/ /USD 12.5 12.8 114.1 119.2 /EUR 14.9 137.7 142.8 136.9 /RMB 16.4 16.6 18.5 19. 15 28.% 28.8% 29.2% 27.3% 28.% 24.2% 24.% 1 19.3% 5 4.2 3.3 3.7 3.7 3.7 3.2 3.2 2.5 Quarterly sales 121.3 122.6 121.2 118. 19.8 12.9 16.9 114.7 111.2 11.9 113. 133. 136.2 132.3 128. 124.3 114.6 116.7 121.4 121.6 129.9 133.2 19.6 19.5 19. 17.9 16.9 15.4 15.7 16.7 16.3 16.6 17. Quarterly segment profit Segment profit Segment profit ratio 2.1% 2.2% 15.9% 18.9% 18.9% 2.6% *1 *1 *1 1.8 2.3 2.5 *1-2.3 3.3 2.5 3. FY14/1Q FY15/1Q FY16/1Q FY17/1Q -5 *1 I Including allowances for bad doubtful accounts in China (FY16/1Q: JPY-1. bn, : JPY -.5bn bn, : JPY-.2:bn, :JPY-4.9bn) -17.8%
<Appendix> Industrial Machinery & Others: Quarterly Sales and Segment Profit 31 1 Quarterly sales 75 5 43.3 59. 53.5 65.6 44.7 56. 53.6 65.7 34.7 44.2 42.2 69.7 38.6 4.5 42.3 25 Exchange rates /USD /EUR /RMB FY14/1Q FY15/1Q FY16/1Q FY17/1Q 14/1Q 14/ 14/ 14/ 15/1Q 15/ 15/ 15/ 16/1Q 16/ 16/ 16/ 17/1Q 17/ 17/ 17/ 12.5 12.8 114.1 119.2 121.3 122.6 121.2 118. 19.8 12.9 16.9 114.7 111.2 11.9 113. 14.9 137.7 142.8 136.9 133. 136.2 132.3 128. 124.3 114.6 116.7 121.4 121.6 129.9 133.2 16.4 16.6 18.5 19. 19.6 19.5 19. 17.9 16.9 15.4 15.7 16.7 16.3 16.6 17. 15 1 5 Quarterly segment profit Segment profit Segment profit ratio 11.3% 7.3% 3.1 8.3% 7.9% 7.2% 7.% 7.3% 7.6% 7.3 4.9% 5.3% 5.7% 4.6 3.8 4.5 4.2 4.4 3.2 1.7 2.3 2.3 8.6% 6. 6.1% 6.1% 2.3 2.4 1.2% 4.3 FY14/1Q FY15/1Q FY16/1Q FY17/1Q -5
<Appendix> Book-to-Bill Ratio of Mining Equipment (6 Months) 32 Komatsu America (Mining eqpt) 73E, 83E, 86E 93E, 96E, 98E 2% 15% 1% 5% Orders received/sales Index Avg. orders in value for 6 months/avg. factory shipment in value for 6 months) % Komatsu Germany (Mining eqpt) PC3, PC4 PC55, PC7 PC8 25% 2% 15% 1% 5% % Komatsu Ltd. (Mining eqpt) HD785, HD15 PC2,PC3 PC4 WA8 up D375A up GD825A up 2% 15% 1% 5% %
<Appendix> Book-to-Bill Ratio of KMC Mining Equipment (6 Months) 33 Avg. orders in value for 6 months/avg. factory shipment in value for 6 months) KMC (Surface) Rope shovels Blast hole drills Draglines, etc. 25% 2% 15% 1% 5% % Orders received/sales Index KMC (Underground) Continuous miners Shearers Load haul dumps Jumbo drills, etc. 25% 2% 15% 1% 5% %
<Appendix> Book-to-Bill Ratio of Industrial Machinery (6 Months) 34 Komatsu Industries 2% Avg. orders in value for 6 months/avg. factory shipment in value for 6 months) Orders received/sales Index 15% 1% 5% Komatsu NTC (Excl. wire saws) % 14/3 14/6 14/9 14/12 15/3 15/6 15/9 15/12 16/3 16/6 16/9 16/12 17/3 17/6 17/9 17/12 2% 15% 1% 5% % 14/3 14/6 14/9 14/12 15/3 15/6 15/9 15/12 16/3 16/6 16/9 16/12 17/3 17/6 17/9 17/12
Komatsu celebrates 1th anniversary of commercial deployment of Autonomous Haulage System (AHS): 1-AHS-trucks-in-operation milestone inspires plans to accelerate pace of mining automation 35 We have celebrated the tenth anniversary of the commercial deployment of its Autonomous Haulage System (hereafter AHS ). Today, more than 1 AHS trucks operate in Australia, North and South America. Based on the 1-year proven record of safety, productivity, environmental resistance and system flexibility in an array of mining environments, Komatsu plans to accelerate the pace of AHS deployment. A standard truck 83E with the AHS retrofit kit running in autonomous mode at Rio Tinto s mine in Australia
Komatsu to acquire Quadco & Southstar operations 36 We have signed an agreement to acquire from Prenbec Equipment (CEO: Charles MacLennan) based in Quebec, Canada, the attachment business, namely, the Quadco and Southstar brands, owned by Prenbec Equipment and its subsidiaries. We plan to complete the acquisition by the end of February. <Attachments owned by Prenbec Equipment> Quadco-brand felling head Komatsu s forest machine with Quadco s felling head Southstar-brand harvester head 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 https://home.komatsu/en/