Presentation for the First 3-Month Period (April-June ... · 1 July 28, 2016 Presentation for the...

1

July 28, 2016

Presentation for the First 3-Month Period(April-June, 2016) of FY2016 Business Results

【Telephone conference】

Komatsu Ltd. Participants

Executive Vice President and CFOSenior Executive Officer andGeneral Manager of Business Coordination Department

Mikio FujitsukaYasuhiro Inagaki

2Contents

: Highlights for the First 3-Month (April - June, 2016) of FY2016 : Segment Sales and Profit for the First 3-Month (April - June, 2016) of FY2016 : Construction, Mining & Utility Equipment (excl. Retail Finance Business):

Results for the First 3-Month (April – June, 2016) of FY2016: Retail Finance Business: Assets and Revenues for the First 3-Month (April - June, 2016) of

FY2016: Industrial Machinery & Others: Results for the First 3-Month (April – June, 2016) of FY2016: Consolidated Balance Sheets

Ⅰ. Highlights of Business Results for the First 3-Month (April – June, 2016) of FY2016 <PP3-10>

Appendix <PP23-30>

Ⅱ. Construction and Mining Equipment: Demand and Outlook <PP11-17>: Construction and Mining Equipment: Demand and Outlook for Seven Major Products

(Global and By Region)

: Quarterly Results: Book-to-Bill Ratio [Orders Received / Sales (6 Months)]

P4P5PP6-7

P8

P9P10

PP12-17

PP24-28PP29-30

III. Construction and Mining Equipment: Mining Equipment and Parts <PP18 – 22>

: Construction and Mining Equipment: Mining Equipment: Construction and Mining Equipment: Parts

PP19-20P21

3

Ⅰ. Highlights of Business Results for the First 3-Month (April – June, 2016) of FY2016

4

Apr.-Jun.,2015 Apr.-Jun.,2016 Changes

Increase(decrease) % Change

Net sales 446.1 389.2 (56.8) (12.7)%

Segment profit 49.6 29.0 (20.6) (41.5)%

Other operating income (expenses) 0.1 0.7 +0.6 -

Operating income 49.7 29.7 (19.9) (40.1)%

Profit ratio 11.1% 7.7% (3.4)pts. -

Other income (expenses) 1.2 (5.5) (6.8) -Net income before income taxes 50.9 24.2 (26.7) (52.5)%

Net income * 32.5 15.5 (16.9) (52.1)%

¥121.3/USD¥133.0/EUR¥19.6/RMB

¥109.8/USD¥124.3/EUR¥16.9/RMB

Highlights of Business Results for the First 3-Month (April - June, 2016) of FY2016 ending March 31, 2017

* Upon adoption of ASC 810, “Net income” is equivalent to “Net income attributable to Komatsu Ltd.”

Billions of yen

・Consolidated net sales declined by 12.7% from the corresponding period a year ago, to JPY389.2 billion.・Operating income dropped 40.1% to JPY29.7 billion. Operating income ratio was 7.7%, down 3.4 percentage points.・Net income attributable to Komatsu Ltd. dropped 52.1% to JPY15.5 billion.・Profits declined sharply, because of 1) the Japanese yen’s appreciation, 2) reduced volume of sales, 3) inventory write-off

of remanufactured/rebuilt parts, and 4) additional allowance for bad debts in the retail finance business in China. [3) and 4) were limited to the first 3-Month period of FY2016.]

5

Review of three business segments■ Construction, Mining & Utility Equipment

Both sales and segment profit declined from the corresponding period a year ago, mainly affected by the Japanese yen’s appreciation and reduced volume of sales in Strategic Markets.

■ Retail Finance [an independent operating segment starting in FY2016]Both revenues and segment profit declined from the corresponding period a year ago, as affected by reduced assets, the Japanese yen’s appreciation, and additional allowance for bad debts in China.

■ Industrial Machinery & OthersBoth sales and segment profit declined from the corresponding period a year ago, as affected by reduced sales of press and other machines as well as exclusion of former Komatsu House Ltd.* from consolidated accounting.

* Komatsu sold the shares, equivalent to 85% of total shares outstanding, of Komatsu House to Nissei Build Industries Co., Ltd. on April 28, 2016.

Apr.-Jun.,2015 Apr.-Jun.,2016Changes

Increase(decrease) % Change

Net sales 446.1 389.2 (56.8) (12.7)%

Construction, mining & utility equipmentRetail financeIndustrial machinery & others

[388.9] 392.3[13.0] 13.8[44.1] 44.7

[343.4] 345.1[11.3] 11.8[34.5] 34.7

[(45.5)] (47.2)[(1.7)] (1.9)[(9.5)] (9.9)

[(11.7%)] (12.0)%[(13.4%)] (14.1)%[(21.7%)] (22.3)%

Elimination (4.8) (2.5) +2.2 -

Segment profit 49.6 29.0 (20.6) (41.5)%

Construction, mining & utility equipmentRetail financeIndustrial machinery & others

42.43.73.2

26.31.81.7

(16.0)(1.8)(1.5)

(37.8)%(49.9)%(47.8)%

Corporate & elimination 0.1 (0.9) (1.1) -

7.6% 15.9%

7.5%10.8%27.3%

11.1%

7.3% 4.9%

Segment Sales and Profits for the First 3-Month (April - June, 2016) of FY2016

Billions of yen

% [ ]: Sales after elimination of inter-segment transactions: Profit ratio

・Construction, Mining & Utility Equipment: Sales declined by 12.0% from the corresponding period a year ago, to JPY345.1 billion.Segment profit dropped 37.8% to JPY26.3 billion. Segment profit ratio was 7.6%, down 3.2 percentage points.

・Retail Finance: Revenues declined by 14.1% to JPY11.8 billion. Segment profit dropped 49.9% to JPY1.8 billion.・Industrial Machinery & Others: Sales declined by 22.3% to JPY34.7 billion. Segment profit dropped 47.8% to JPY1.7 billion.

6

Japan Japan

North America North

America

Europe Europe

Latin America Latin

America

CISCIS

ChinaChina

AsiaAsia

Oceania

Oceania

Middle East

Middle East

Africa

Africa

0

50

100

150

200

250

300

350

400

Apr.-Jun., 2015 Apr.-Jun., 2016

388.9

343.4(7.9)[(11.7)%]

(45.5)[(11.7)%]

(0.2)[(0.3)%]

(1.7)[(4.5)%]

(12.3)[(23.5)%]

(8.0)[(46.8)%]

(8.3)[(35.0)%]

(9.4)[(16.1)%]

+4.0[+34.9%]

(1.6)[(6.3)%]

+0.0[+0.5%]

Billions of yen Japan North

America Europe Latin America CIS China Asia Oceania Middle

East Africa Total

Apr.-Jun.,2015 67.5 75.8 37.5 58.4 11.5 18.6 52.6 25.6 17.2 23.7 388.9

Apr.-Jun.,2016 59.6 75.6 35.8 49.0 15.6 18.7 40.2 24.0 9.1 15.4 343.4

388.9

343.4

17%

19%

10%

15%

3%5%

14%

7%

4%

6%

17%

22%

10%

14%

5%5%

12%

7%

3%5%

Construction, Mining & Utility Equipment (excl. Retail Finance Business): Sales by Region (To Outside Customers) for the First 3-Month (April - June, 2016) of FY2016

Apr.-Jun.,2015

PlusMinus

Strategic MarketsTraditional Markets

TraditionalMarkets46%

Strategic Markets54%

TraditionalMarkets50%

Strategic Markets50%

Billions of yenVs. Apr.-Jun., 2015

Apr.-Jun.,2016

・Sales to outside customers declined by 11.7% from the corresponding period a year ago, to JPY343.4 billion.・Except for CIS and China, sales declined in all regions. Sales dropped sharply in Strategic Markets, such as Asia and Latin America,

increasing the share of Traditional Markets in total sales to 50%.

7

392.3

345.1

250

280

310

340

370

400

Apr.-Jun.,2015

Apr.-Jun.,2016

(47.2) billion yen

42.4

26.3

0

10

20

30

40

50

Apr.-Jun.,2015

Apr.-Jun.,2016

7.6%10.8%

(16.0) billion yen

¥121.3/USD¥133.0/EUR¥19.6/RMB

¥109.8/USD¥124.3/EUR¥16.9/RMB

Construction, Mining & Utility Equipment (excl. Retail Finance Business) : Causes of Difference in Sales and Segment Profit for the First 3-Month (April - June, 2016) of FY2016

SalesApr.-Jun., 2015 vs. Apr.-Jun., 2016

Segment profitApr.-Jun., 2015 vs. Apr.-Jun., 2016

Billions of yen

Billions of yen

Positive factorsNegative factor

Positive factorsNegative factor

Volume, etc. (13.2)

Selling price+0.5

Foreign exchange rate

(34.5)

Volume, etc. (14.8)

Fixed costs+1.3

Selling price+0.5

Foreign exchange rate

(3.0)

Segment profit ratio

・Sales declined by JPY47.2 billion from the corresponding period a year ago, as affected by the Japanese yen’s appreciation and asharp drop in the volume of sales resulting from reduced demand in Strategic Markets, such as the Middle East and Indonesia. Segment profit declined JPY16.0 billion.

・Segment profit ratio degenerated to 7.6%, down 3.2 percentage points.

8

Japan JapanEurope EuropeChina China

Oceania OceaniaOthers Others

North America North

America

0

100

200

300

400

500

600

700

800

¥112.7/USD¥127.7/EUR¥17.4/RMB

13.811.8

3.71.8

0

5

10

15

20SalesSegment profit651.5

602.3

¥121.3/USD¥133.0/EUR¥19.6/RMB

¥102.9/USD¥114.4/EUR¥15.5/RMB

¥109.8/USD¥124.3/EUR¥16.9/RMB

Apr.-Jun., 2016Apr.-Jun., 2015

Retail Finance Business: Assets and Revenues for the First 3-Month (April - June, 2016)of FY2016

Billions of yenRevenues

Apr.-Jun., 2015 vs. Apr.-Jun., 2016Assets

Mar 31, 2016 vs. June 30, 2016 Billions of yen

Mar 31, 2016 June 30, 2016

Billions of yen 2016/3E 2016/6E Changes

Interest-bearing debt 483.5 451.8 (31.7)

Interest-bearing debt, net 476.6 445.6 (31.0)

Net D/E ratio 3.40 3.50 +0.10

・Assets declined by JPY49.2 billion from the previous fiscal year-end, as affected the Japanese yen’s appreciation and reduced receivables especially in China and Oceania.

・Segment profit declined from the corresponding period a year ago, mainly due to recording an additional allowance for bad debts in China.

9

3.1 3.2

1.7

7.3% 7.3% 4.9%

0

5

10

0

2

4

Apr.-Jun., 2014 Apr.-Jun., 2015 Apr.-Jun., 2016

（%）

Apr.-Jun., 2014 Apr.-Jun., 2015 Apr.-Jun., 2016Changes

Increase(decrease) % change

Komatsu Industries Corp., etc.[total of press and sheet-metal machines] 13.3 12.8 7.7 (5.1) (39.8)%

Komatsu NTC Ltd.[represented by wire saws]

16.7[1.9]

14.0[1.1]

12.6[5.5]

(1.3)[+4.4]

(9.9)%[+388.1%]

Gigaphoton 6.5 8.3 8.5 +0.1 +2.2%

Komatsu House 2.5 3.7 - (3.7) -

Others 4.1 5.8 5.8 +0.0 +1.2%

Total 43.3 44.7 34.7 (9.9) (22.3)%

*1: Komatsu sold the shares, equivalent to 85% of total shares outstanding, of Komatsu House to Nissei Build Industries Co., Ltd. on April 28, 2016.

Industrial Machinery & Others: Sales and Segment Profit for the First 3-Month (April - June, 2016) of FY2016

Sales Segment profitBillions of yen

Billions of yen

Breakdown of sales

Billions of yen

*1

43.3 44.734.7

0

20

40

60

Apr.-Jun., 2014 Apr.-Jun., 2015 Apr.-Jun., 2016

Komatsu House*1

:Segment profit ratio

・While Gigaphoton Inc. recorded good sales, supported by stable utilization of machines in the semiconductor manufacturing industry, sales declined by 22.3% from the corresponding period a year ago, to JPY34.7 billion, as affected by reduced sales of press and other machines and the exclusion of former Komatsu House Ltd. from consolidated accounting. Segment profit ratio was 4.9%.

10

Mar. 31, 2016 June 30, 2016Increase (decrease)

Cash & deposits (incl. time deposits) [a] 108.4 108.2 (0.2)Accounts receivable (incl. long-term trade receivables) 875.3 768.3 (106.9)Inventories 539.6 524.2 (15.3)Tangible fixed assets 697.7 656.2 (41.4)Other assets 393.5 362.2 (31.2)Total assets 2,614.6 2,419.4 (195.2)Accounts payable 205.4 187.0 (18.3)Interest-bearing debt [b] 457.5 431.0 (26.5)Other liabilities 363.9 323.2 (40.6)Total liabilities 1,026.8 941.2 (85.6)[Shareholders’ equity ratio] [58.0%] [58.5%] [+0.5pts.]Komatsu Ltd. shareholders’ equity 1,517.4 1,414.5 (102.8)Noncontrolling interests 70.3 63.5 (6.8)Liabilities & Equity 2,614.6 2,419.4 (195.2)

Billions of yen

Interest-bearing debt, net [b-a] 349.0 322.7 (26.3)

Net D/E ratio 0.23 0.23

Consolidated Balance Sheets

¥112.7/USD¥127.7/EUR¥17.4/RMB

¥102.9/USD¥114.4/EUR¥15.5/RMB

・ Total assets declined by JPY195.2 billion from the previous fiscal year-end, due to the Japanese yen’s appreciation and reduced receivables.

・ Komatsu Ltd. shareholders’ equity ratio increased 0.5 percentage points to 58.5%.

11

II. Construction and Mining Equipment: Demand and Outlook

12

・In the first 3-Month period of FY2016, global demand declined by 11% from the corresponding period a year ago.・While demand was steady in some regions, global demand was especially affected by a drop in Japan, North America, China, the

Middle East and Indonesia.・We project that global demand should remain as we projected at the start of the fiscal year, even though there will be some ups and

downs in some regions.

+16%+13% +15%

-20% -20%

+45%

+5%-7% +3%

-9%

-14%

-60%

-40%

-20%

0%

20%

40%

60%

0

100,000

200,000

300,000

400,000

500,000

600,000

FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

Japan N.AmericaEurope ChinaOthers Y-O-Y growth rate

100

8064

9297

9093

8472

-1% -2%-10% -15%

-3%+2%+8%+7%

-5% -4% 9%-19%-16%-18%

-12% -9%

-11% -30%

0%

30%

60%

90%

120%

0

30,000

60,000

90,000

120,000

150,000

FY12/1QFY12/2QFY12/3QFY12/4QFY13/1QFY13/2QFY13/3QFY13/4QFY14/1QFY14/2QFY14/3QFY14/4QFY15/1QFY15/2QFY15/3QFY15/4QFY16/1Q

Japan N.AmericaEurope ChinaOthers Y-O-Y growth rate

Quarterly demand for 7 major productsAnnual demand for 7 major productsUnits

UnitsGrowth rate Growth rate

Note: Estimated by Komatsu

Initial projection

FY15：-14%FY16：-5%〜-10% (Initial projection)

：FY07=100Index

Construction and Mining Equipment: Demand and Outlook for 7 Major Products

13

0

4000

8000

12000

16000

-100%

-75%

-50%

-25%

0%

25%

50%

75%

100%

FY12/1Q

2Q 3Q 4Q FY13/1Q

2Q 3Q 4Q FY14/1Q

2Q 3Q 4Q FY15/1Q

2Q 3Q 4Q FY16/1Q

Demand (units) Y-o-Y change (%)

97

：FY07/1Q=100 1Q： -24%Index

0

20,000

40,000

60,000

80,000

0

10

20

30

40

50

60

70

80

90

100

'98

'99

'00

'01

'02

'03

'04

'05

'06

'07

'08

'09

'10

'11

'12

'13

'14

'15

'16

-42%

-14%

Construction and Mining Equipment: Demand in Major Markets (1) Japan

Demand for new equipment (7 major products) and construction investment

Construction investmentTrillion of yen

Demand for new equipment/Export of used equipment (Units)

Exports of used equipment

Demand for new equipment

Government construction

Private-sector residentialPrivate-sector non-residential

[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


Quarterly demand for 7 major products

Quarterly demand for hydraulic excavators (Rental & regular uses)Y-O-Y

growth rate↓

Rental

Regular

Y-O-Ygrowth rate Units

Units

0

4,000

8,000

12,000

FY12/1Q

2Q 3Q 4Q FY13/1Q

2Q 3Q 4Q FY14/1Q

2Q 3Q 4Q FY15/1Q

2Q 3Q 4Q FY16/1Q

Rental companiesRegular customers

Initial projection

75 7456

82

・In the first 3-Month period of FY2016, demand declined by 24% from the corresponding period a year ago. ・Demand continues to be affected by rebound of pre-buys for new emission controls especially among rental companies.

14

0

10,000

20,000

30,000

-60%

-40%

-20%

0%

20%

40%

60%

FY12/1Q

2Q 3Q 4Q FY13/1Q

2Q 3Q 4Q FY14/1Q

2Q 3Q 4Q FY15/1Q

2Q 3Q 4Q FY16/1Q

Demand (units) Y-o-Y change (%)

82 80 92 88

Index ：FY07/1Q=100

77

0%

20%

40%

60%

80%

100%

FY07

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15

FY15/1Q

FY16/1Q

Rental-distributor(DORF)Rental-RegularMining & energy

Road

Construction

Others

-1%

-37%

0

20,000

40,000

60,000

80,000

FY04FY05FY06FY07FY08FY09FY10FY11FY12FY13FY14FY15FY16

050100150200250

1Q： -12%

+4%

[Source]: Demand for 7 major products estimated by Komatsu

USACanada

Demand for 7 major products(Units)

Demand for 7 major products and US housing starts

Construction and Mining Equipment: Demand in Major Markets (2) North America

Housing starts

FY15：-6%FY16：-5%〜-10%(Initial projection)

Housing starts in ten thousands

Quarterly demand for 7 major products

Breakdown of demand by segment (Unit basis)


Rental

Mining & energy

Others

Y-O-Y growth rate

Initial projection

・In the first 3-Month period of FY2016, demand declined by 12% from the corresponding period a year ago.・In the United States, demand is steady in regular customers against the backdrop of a gradual increase in residential construction.

Demand was sluggish in the rental industry. ・In Canada, demand remains slack especially in the energy sector.

15

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15

SouthernEasternOther Western CountriesNorthernThe UK., France, and Germany

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

0

5,000

10,000

15,000

-40%

-20%

0%

20%

40%

60%

FY12/1Q2Q 3Q 4Q FY13/1Q2Q 3Q 4Q FY14/1Q2Q 3Q 4Q FY15/1Q2Q 3Q 4Q FY16/1Q

Demand (units) Y-o-Y change (%)57 6055


62 63

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

FY15(Apr.-May)

FY16(Apr.-May)

1Q： +1%

Construction and Mining Equipment: Demand in Major Markets (3) Europe

Annual demand for 7 major products Quarterly demand for 7 major products

Region demand for 7 major products （Excl. 6t class）


Units

Units

FY15：+3%FY16：+/-0%〜+5%(Initial projection)

[Source]: Demand for 7 major products estimated by Komatsu

Initial projection

・In the first 3-Month period of FY2016, demand increased by 1% from the corresponding period a year ago.・Demand was firm in major markets centering on Germany as well as northern and southern Europe.

16

・In the first 3-Month period of FY2016, demand declined by 20% from the corresponding period a year ago.・While we project full-year demand will decrease from FY2015, the rate of decline is becoming smaller. Average monthly hours of

machine operation also continue to increase from the corresponding months a year ago.

0

20,000

40,000

60,000

80,000

100,000

120,000

FY03FY04FY05FY06FY07FY08FY09FY10FY11FY12FY13FY14FY15FY16

0

10,000

20,000

30,000

-100%

-50%

0%

50%

100%

150%


Demand (units) Y-O-Y growth rate

-11%-6%

-12%-9%-13%-15%

-13%

-17%-12%

19%

-22%-29%

-13%-16%-15%-8%-10%

-8%-8%

-10%

-7%-14%

3%

29%

1% 6%10%

-80%-60%-40%-20%0%20%40%60%80%

0

50

100

150

200 Operating hours (left scale)Y-o-Y (right scale)

10145

88


36

112

1Q： -20%

0

5,000

10,000

15,000

4 5 6 7 8 9 10 11 12 1 2 3

FY2012FY2013FY2014FY2015FY2016

Initial projection

Annual demand for 7 major products (Foreign makers) Quarterly demand for 7 major products (Foreign makers)Units

Construction and Mining Equipment: Demand in Major Markets (4) China


Monthly demand for hydraulic excavators: Total of 6-ton and larger models)KOMTRAX in China : Average operating hours per month

[Source]: Demand for 7 major products and hydraulic excavators estimated by Komatsu

Hours


Units

＜Chinese New Year＞： Feb. 10, 2013： Jan. 31, 2014： Feb. 19, 2015： Feb. 8, 2016： Jan. 28, 2017

(month)

17

0

10,000

20,000

30,000

40,000

FY04FY05FY06FY07FY08FY09FY10FY11FY12FY13FY14FY15FY16

Indonesia

Others

Malaysia

Thailand

01000200030004000500060007000

FY10/1Q2Q 3Q 4Q FY11/1Q2Q 3Q 4Q FY12/1Q2Q 3Q 4Q FY13/1Q2Q 3Q 4Q FY14/1Q2Q 3Q 4Q FY15/1Q2Q 3Q 4Q FY16/1Q

ForestryAgricultureConstructionMining

1Q ： -14%

0

3,000

6,000

9,000

12,000

-80%

-40%

0%

40%

80%

120%

160%

FY12/1Q

2Q 3Q 4Q FY13/1Q

2Q 3Q 4Q FY14/1Q

2Q 3Q 4Q FY15/1Q

2Q 3Q 4Q FY16/1Q

Indonesia Others MalaysiaThailand Y-o-Y change (%)262

151 127

Index ： FY07/1Q=100

122205

1Q： -4%

Construction and Mining Equipment: Demand in Major Markets (5) Southeast Asia

Annual demand for 7 major products Quarterly demand for 7 major products

Initial projection[Source]: Demand for 7 major products estimated by Komatsu

UnitsUnitsY-O-Y

growth rate

Indonesia: Demand for construction & mining equipment by industrial sectorUnits

FY15：-15%FY16：+/-0%〜-5% (Initial projection)

・In the first 3-Month period of FY2016, demand decreased by 4% from the corresponding period a year ago. ・While demand has remained sluggish in Indonesia, the largest market of the region, it is steady in Thailand and Malaysia.

18

III. Construction and Mining Equipment:Mining Equipment and Parts

19

+25%+5%

-11%

-32%

-55%

-54%

-49%

-45%-33%

-22%

-26%

-15%-2%

-25%

-12%-24%

-35%

-50%

0%

50%

100%

0

500

1,000

1,500

2,000

2,500

3,000


Middle East &Africa

Oceania

Asia

Japan&China

Europe&CIS

Latin America

N. America

Y-o-Y change

+6% +15%

-34%

+39% +51%-5%

-51%

-25%

-16%

-100%

-50%

0%

50%

0

2,000

4,000

6,000

8,000

10,000

FY07FY08FY09FY10FY11FY12FY13FY14FY15FY16

Middle East &Africa

Oceania

Asia

Japan&China

Europe&CIS

LatinAmerica

N. America

Y-o-Y change

Annual demand for mining equipment Quarterly demand for mining equipment

Units Y-o-Y change

・Dump trucks: 75 tons (HD785) and larger・Bulldozers: 525HP (D375) and larger・Excavators: 200 tons (PC2000) and larger

Units Y-o-Y change

FY16：-15%〜-20% (Initial projection)

Construction and Mining Equipment: Demand for Mining Equipment and Outlook

・Wheel loaders: 810HP (WA800) and larger ・Motor graders: 280HP (GD825) and larger

Note: Demand estimated by Komatsu

Initial projection

・In the first 3-Month period of FY2016, global demand for mining equipment dropped 35% from the corresponding period a year ago. ・With respect to full-year demand, we are not changing our projection made at the start of the fiscal year.

20

196.1 214.9

194.3

96.3 91.7 84.2

206.8 140.6

115.6

+22%+18%

-14%

+15%+33%

+11%

-18%-1% -10% -12%

-50%

0%

50%

0

200

400

600

800

FY07FY08FY09FY10FY11FY12FY13FY14FY15FY16 FY14FY15FY16

356.5

422.0

361.5

554.0

614.5

417.0

506.3499.3

447.3

54.9 52.7

56.9

50.4 45.7

23.5 22.9 23.2

22.1 19.4

37.5 34.4

33.6

35.0 33.2

+24%+20%

+4%-1%

-17%-27% -23%

-4% -7%-3%

+20%

-19%

-4%

-4%-12%

-12%

-15%

-50%

0%

50%

0

50

100

150

200

250


FY15/1Q2Q 3Q 4Q FY16/1Q

Middle East & Africa OceaniaAsia ChinaEurope & CIS Latin AmericaN. America Y-o-Y change

139.1157.0163.4

129.6119.2

155.2

107.2115.9

150.5120.9

118.7128.8

130.8

110.1113.7

394.1

107.598.3

Construction and Mining Equipment: Sales of Mining Equipment

Annual sales of mining equipment (incl. parts and service) Quarterly sales of mining equipment (incl. parts and service)

Y-o-Y change

Billions of yenBillions of yen

Y-o-Y change

PartsEquipm

entService, etc

Equipment

PartsService, etc.

Initial projection Initial projection

・For the first 3-Month period of FY2016, sales declined by 15% from the corresponding period a year ago, to JPY98.3 billion, as affected by the Japanese yen’s appreciation and reduced sales of parts.

21

105.0 113.0 118.0 138.5 158.0 171.5 187.4 196.1 214.9 194.3

154.5 152.0 120.0 141.5

159.0 148.0 176.3

191.1 182.6 170.4

+2%

-10%

+18% +13%

+1%

+14%+6%

+3%-8%

-20%

0%

20%

0

100

200

300

400

500

600

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

Construction equipment Mining equipmentY-o-Y change

238.0

280.0317.0

265.0

319.5363.7

259.5

387.2397.5

43.0 43.7

39.6 45.2 49.2 44.6 46.3

47.3 45.8

46.4 50.8

53.1 54.9 52.7

56.9 50.4

45.7

37.3 36.0 34.7

40.0 45.2

44.2 41.8 45.1 45.7 46.4

49.2 49.8

47.2 46.1

44.4 44.9

42.1

-1%+3%

-3%+4%

+18%+11%

+19%

+8%-3%

+5%+14% +11%+12%

+7% +1%-7%

-14%

-20%

0%

20%

0

20

40

60

80

100

120

140


Construction equipment Mining equipmentY-o-Y change

88.1 91.680.3

74.379.7

85.288.8

94.4 92.4 92.8

102.9102.1100.0 98.8

101.3

95.3364.7

Construction and Mining Equipment: Sales of Parts

Annual sales of parts Quarterly sales of partsBillions of yen

Billions of yen

Y-o-Y change (%) Y-o-Y change (%)

87.8

Initial projection

・For the first 3-Month period of FY2016, sales of parts declined by 14% from the corresponding period a year ago.・Sales declined mainly due to the Japanese yen’s appreciation and the rate of increase in hours of machine operation becoming

smaller.

22

Cautionary StatementThe 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/

Miku Tashiro, representing Japan in the 63kg- category

Chen-Ling Lien, representing Taiwan in the 57kg- category

These two members of Komatsu Women’s Judo Team will compete in the 2016 Rio Olympic Games. It will be their first time to compete in Olympics. Komatsu would like to ask you to give them a cheer.

23

Appendix

24

-11.9 -8.9 -14.4 -19.3 -10.2 -5.2 -6.2 -4.5 -4.8 -3.6 -6.5 -6.1 -2.5

411.9 407.3 417.5 496.2

411.8 416.7 433.8 467.3 392.3 380.5 417.4 411.6 345.1

14.7 12.3 15.9 22.9

15.2 11.7 12.9 13.6 13.8 13.5 13.4 13.1

11.8

40.3 59.2 45.3

64.2

43.3 59.0 53.565.6

44.7 56.053.6 65.7

34.7

0

100

200

300

400

500

600

FY13/1Q 2Q 3Q 4Q FY14/1Q 2Q 3Q 4Q FY15/1Q 2Q 3Q 4Q FY16/1Q 2Q 3Q 4Q

Industrial Machinery & OthersRetail FinanceConstruction, Mining & Utility EquipmentElimination

52.4 56.5 56.674.8

63.4 62.1 56.2 60.149.7 49.3 55.6 53.9

29.7

11.5% 12.0% 12.2%13.3% 13.8% 12.9%

11.4% 11.1% 11.1% 11.0% 11.6% 11.1%

7.7%

0

20

40

60

80

100

120


Operating profitOperating profit ratio

455.1 469.9

¥/USD

¥/EUR

¥/RMB

16/1Q 16/2Q 16/3Q 16/4Q

109.8

124.3

16.9

13/1Q 13/2Q 13/3Q 13/4Q

97.3 98.6 99.7 102.7

126.4 129.9 135.1 139.9

15.8 16.1 16.3 16.9

464.3

564.1

15/1Q 15/2Q 15/3Q 15/4Q

121.3 122.6 121.2 118.0

133.0 136.2 132.3 128.0

19.6 19.5 19.0 17.9

460.2

14/1Q 14/2Q 14/3Q 14/4Q

102.5 102.8 114.1 119.2

140.9 137.7 142.8 136.9

16.4 16.6 18.5 19.0

482.3 494.0542.0

446.1446.3

478.0 484.4389.2

<Appendix>Quarterly Sales and Operating Income

Quarterly sales

Quarterly operating income

Billions of yen

Billions of yen

Exchange rates

25

411.9 407.3 417.5 496.2411.8 416.7 433.8 467.3 392.3 380.5 417.4 411.6 345.1

0100200300400500600


48.9 49.3 55.875.6

53.2 55.1 51.0 51.6 42.440.7 41.4 44.3

26.311.9%

12.1% 13.4% 15.2% 12.9% 13.2% 11.8%11.0% 10.8% 10.7% 9.9% 10.8% 7.6%

61% 57% 56% 58% 60%55% 53% 51% 54% 48% 47% 45% 50%

020406080

100120


Segment profit Segment profit ratio Percentage of sales in Strategic Markets

Quarterly Sales

¥/USD¥/EUR¥/RMB

13/1Q 13/2Q 13/3Q 13/4Q97.3 98.6 99.7 102.7

126.4 129.9 135.1 139.915.8 16.1 16.3 16.9

14/1Q 14/2Q 14/3Q 14/4Q102.5 102.8 114.1 119.2140.9 137.7 142.8 136.916.4 16.6 18.5 19.0

16/1Q 16/2Q 16/3Q 16/4Q109.8124.316.9

15/1Q 15/2Q 15/3Q 15/4Q121.3 122.6 121.2 118.0133.0 136.2 132.3 128.019.6 19.5 19.0 17.9

15% 19% 21% 20% 17% 21% 21% 24% 22% 23% 23% 29% 23%23% 20% 21% 22% 22% 18% 16% 17% 15% 13% 13% 14% 15%15% 13% 9% 16% 13% 12% 12% 11% 10% 9% 8% 9% 10%

47% 47% 49% 42% 48% 49% 51% 48% 53% 55% 55% 48% 52%

0%

20%

40%

60%

80%

100%


Parts, etc Mining equipment Construction equipment(Stragegic Markets) Construction equipment(Traditional Markets)Breakdown of sales(%)

Quarterly segment profit

Billions of yen

Billions of yen

Starting in FY2016, we separate the retail finance business as an independent operating segment, whereas it was included in the construction, mining and utility equipment business up through FY2015. Accordingly, the quarterly figures below were reclassified and restated in agreement with the figure for the first quarter of FY2016.

<Appendix>Construction, Mining & Utility Equipment (excl. Retail Finance Business): Quarterly Sales and Segment Profit

26

65.8 83.0 95.0 95.9 65.3 85.2 92.3 85.2 67.5 80.0 81.2 78.8 59.6

60.6 65.4 58.5 69.5

56.8 68.6 76.6 100.7

75.8 82.9 105.1 106.2

75.6

29.626.1 27.4

35.9

39.333.7

32.240.4

37.532.7

30.7 38.4

35.8

57.161.2 64.6

73.8

60.164.7

68.570.3

58.4 48.358.2 50.0

49.018.5

17.2 16.1 16.6

14.3 13.6

14.3 11.9

11.5 11.7

13.1 11.2

15.6 39.3

29.2 37.6

47.8

33.4 25.2

22.6 21.6

18.6 13 1

16.4 21.4

18.7

47.5 43.5 43.0

58.1

54.9 48.0

51.3 56.3

52.6 46.5

47.9 42.4

40.2

45.1 38.030.4

33.3

34.734.1

31.529.3

25.6 28.1

26.9 26.2

24.0

13.6 13.6 9.0

19.1

15.714.8

11.318.8

17.2 14.0

14.6 12.7

9.1

24.9 24.3 28.1

30.8

29.3 25.028.3

29.1

23.7 20.3

17.5 20.8

15 4

0

100

200

300

400

500


404.1402.4413.5 429.4

464.2

¥/USD¥/EUR¥/RMB

388.9

13/1Q 13/2Q 13/3Q 13/4Q97.3 98.6 99.7 102.7

126.4 129.9 135.1 139.915.8 16.1 16.3 16.9

14/1Q 14/2Q 14/3Q 14/4Q102.5 102.8 114.1 119.2140.9 137.7 142.8 136.916.4 16.6 18.5 19.0

16/1Q 16/2Q 16/3Q 16/4Q109.8124.316.9

15/1Q 15/2Q 15/3Q 15/4Q121.3 122.6 121.2 118.0133.0 136.2 132.3 128.019.6 19.5 19.0 17.9

378.0412.1 408.4

343.4

401.9 410.1

481.2

Billions of yen

Africa

Middle East

Oceania

Asia

China

CIS

Latin America

Europe

North America

Japan

Exchange rates

<Appendix>Construction, Mining & Utility Equipment: Quarterly Sales (To Outside Customers) by Region

Starting in FY2016, we separate the retail finance business as an independent operating segment, whereas it was included in the construction, mining and utility equipment business up through FY2015. Accordingly, the quarterly figures below were reclassified and restated in agreement with the figure for the first quarter of FY2016.

27

14.7 12.3

15.9

22.9

15.2 11.7 12.9 13.6 13.8 13.5 13.4 13.1

11.8

0

5

10

15

20

25


3.6 3.5 3.42.3

4.23.3 3.7 3.2 3.7 3.7 3.2 2.5 1.8

24.7%28.6%

21.4%

10.1%

28.0% 28.8% 29.2%

24.2%27.3% 28.0%

24.0%19.3%

15.9%

0

5

10

15


Segment profit Segment profit ratio

¥/USD¥/EUR¥/RMB

13/1Q 13/2Q 13/3Q 13/4Q97.3 98.6 99.7 102.7

126.4 129.9 135.1 139.915.8 16.1 16.3 16.9

14/1Q 14/2Q 14/3Q 14/4Q102.5 102.8 114.1 119.2140.9 137.7 142.8 136.916.4 16.6 18.5 19.0

16/1Q 16/2Q 16/3Q 16/4Q109.8124.316.9

15/1Q 15/2Q 15/3Q 15/4Q121.3 122.6 121.2 118.0133.0 136.2 132.3 128.019.6 19.5 19.0 17.9

Exchange rates

<Appendix>Retail Finance : Quarterly Sales and Segment Profit

Quarterly sales

Quarterly segment profitBillions of yen

Billions of yen

28

40.3

59.2 45.3

64.2

43.3

59.0 53.5

65.6

44.7 56.0 53.6

65.7

34.7

0

25

50

75

100


0.8

3.9

-3.6

0.93.1

4.6 3.8 4.53.2 4.2 4.4

7.3

1.7

2.0%

6.7%

-8.1%

1.4%

7.3% 7.9% 7.2% 7.0% 7.3% 7.6% 8.3%11.3%

4.9%

-5

0

5

10

15


Segment profit Segment profit ratio

*1

*1

¥/USD¥/EUR¥/RMB

13/1Q 13/2Q 13/3Q 13/4Q97.3 98.6 99.7 102.7

126.4 129.9 135.1 139.915.8 16.1 16.3 16.9

14/1Q 14/2Q 14/3Q 14/4Q102.5 102.8 114.1 119.2140.9 137.7 142.8 136.916.4 16.6 18.5 19.0

16/1Q 16/2Q 16/3Q 16/4Q109.8124.316.9

15/1Q 15/2Q 15/3Q 15/4Q121.3 122.6 121.2 118.0133.0 136.2 132.3 128.019.6 19.5 19.0 17.9

<Appendix>Industrial Machinery & Others: Quarterly Sales and Segment Profit

Quarterly sales

Quarterly segment profit

Billions of yen

Exchange rates

Billions of yen

*1 Including a loss of JPY10.8 bn on Komatsu NTC’s wire saw inventories (FY13/3Q: JPY-7.6 bn, and FY13/4Q: JPY-3.2 bn)

29

0%

50%

100%

150%

200%

0%

50%

100%

150%

200%

0%

50%

100%

150%

200%

Orders received/Sales IndexKomatsu America(Mining eqpt)

Komatsu MiningGermany

PC3000, PC4000PC5500, PC7000PC8000

Komatsu Ltd.(Mining eqpt)

HD785, HD1500 PC2000,PC3000, PC4000, WA800 upD375A upGD825A up

730E, 830E, 860E,930E, 960E,980E

Avg. orders in value for 6 months/Avg. factory shipment in value for 6 months)

<Appendix>Orders Received / Sales Index for Mining Equipment (6 Months)

30

0%

50%

100%

150%

200%

12/06 12/09 12/12 13/03 13/06 13/09 13/12 14/03 14/06 14/09 14/12 15/03 15/06 15/09 15/12 16/03 16/06

0%

50%

100%

150%

200%

12/06 12/09 12/12 13/03 13/06 13/09 13/12 14/03 14/06 14/09 14/12 15/03 15/06 15/09 15/12 16/03 16/06

Orders received/Sales Index

Komatsu Industries

Komatsu NTC(Excl. wire saws)

Avg. orders in value for 6 months/Avg. factory shipment in value for 6 months)

<Appendix>Orders Received / Sales Index for Industrial Machinery (6 Months)

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