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Presentation2

  1. 1. Projection for FY2012 Tasks and Projection for FY2012 ending March 31, 2013 April 26, 2012 Yasushi Sakano Executive OfficerGeneral Manager, Business Coordination Department Komatsu Ltd. 1
  2. 2. Projection for FY2012 Outline of Projection for FY2012 ending March 31, 20131.Sales and profits: Both sales and profits should increase from FY2011, mainly reflecting an increase in demand for construction equipment in Japan and North America as well as an increase in sales of mining equipment and parts. Operating income ratio should also improve, and we should be able to achieve an operating income ratio of 15%, the target figure of the mid-range management plan. FY2011 Results FY2012 Projection Change Net sales 1,981.7 bil yen 2,100.0 bil yen + 6.0 % Operating income 256.3 bil yen 315.0 bil yen + 22.9 % Operating income ratio 12.9 % 15.0 % + 2.1 pts Net income* 167.0 bil yen 190.0 bil yen + 13.7 % ROE 17.3 % 18.0 % + 0.7 pts Net debt-to-equity ratio 0.56 0.43 (0.13) pts ([Excl. retail finance business] (0.28) (0.20) (0.08) pts * “Net income” is equivalent to “Net income attributable to Komatsu Ltd.” in accordance with the FASB Accounting Standards Codification (ASC) 810. (Reference)2. Outlook of two business segments Sales and profits converted to USD and EUR denominations* FY2011 FY2012 - Construction, Mining and Utility Equipment Million USD Results Projection % change In addition to an increase in sales of high-margin mining equipment, Net sales 24,168 26,250 +8.6% parts and service, we project that demand for construction equipment Operating income 3,126 3,938 +26.0% will increase steadily in Traditional Markets, centering on North Net income 2,037 2,375 +16.6% America. Both sales and profits should increase from FY2011. FY2011 FY2012 - Industrial Machinery and Others Million EUR Results Projection % change While we should be able to receive steady orders for presses and Net sales 18,016 20,000 +11.0% machine tools, we expect orders for wire saws to decline and end Operating income 2,330 3,000 +28.7% to extraordinary demand for prefabricated structures for use in Net income 1,519 1,810 +19.2% temporary shelters. In this light, both sales and profits should *The exchange rates for FY2011 reflect the rates at the end of FY2011. decline from FY2011. The exchange rates for FY2012 reflect the rates of projection for FY2012. FY2011 FY2012 Increase 3. Cash dividends (decrease) Annual cash dividends of 48 yen per share are planned. Interim 21 yen 24 yen* + 3 yen* Year end 21 yen 24 yen* + 3 yen* (Consolidated payout ratio should translate into 24%.) Total 42 yen 48 yen* + 6 yen* 2 *Projected
  3. 3. Projection for FY2012 Projection for FY2012 ending March 31, 2013- Net sales should increase by 6.0% to 2,100 billion yen, and operating income by 22.9% to 315 billion yen.- Operating income ratio should improve by 2.1 percentage points to 15.0%. Billions of yen FY2011 Results FY2012 Projection % : Profit ratio 1USD = 79 yen 1USD = 80 yen Increase Change [ ]: Sales after elimination of 1EUR = 110yen 1EUR = 105 yen (decrease) % 1RMB = 12.4yen 1RMB = 12.8 yen inter-segment transactionsNet sales 1,981.7 2,100.0 +118.2 +6.0 % Construction, Mining & Utility Equipment [1,739.3] 1,744.2 [1,886.0] 1,890.0 [+146.6] +145.7 [+8.4%] +8.4 % Industrial Machinery & Others [242.4] 251.1 [214.0] 220.0 [(28.4)] (31.1) [(11.7)%] (12.4) % Elimination (13.6) (10.0) +3.6 -Segment profit 13.1 % 258.6 15.3 % 321.0 +62.3 +24.1 % Construction, Mining & Utility Equipment 14.1 % 246.2 16.9 % 320.0 +73.7 +29.9 % Industrial Machinery & Others 6.7 % 16.7 3.2 % 7.0 (9.7) (58.3) % Corporate & elimination (4.4) (6.0) (1.5) -Other operating income (expenses) (2.3) (6.0) (3.6) -Operating income 12.9 % 256.3 15.0 % 315.0 +58.6 +22.9 %Other income (expenses) (6.7) (7.0) (0.2) -Income before income taxes 249.6 308.0 + 58.3 + 23.4 %Net income *1 167.0 190.0 +22.9 + 13.7 %Cash dividends per share 42 yen 48 yen +6 yen*1 Upon adoption of ASC 810, “Net income” is equivalent to “Net income attributable to Komatsu Ltd.” 3
  4. 4. Projection for FY2012Construction, Mining & Utility Equipment : Projection of Sales to Outside Customer by Region and Segment Profit - Sales to outside customer of this segment should increase by 8.4%, mainly supported by an increase in sales of construction equipment in Japan and North America and of mining equipment and parts in Strategic Markets. - Segment profit should improve by 2.8 percentage points to 16.9%, mainly reflecting an increase in the percentage share of high-margin mining equipment and parts in total sales. Sales by region (To outside customers) Breakdown (%) Segment profit2,400Billions Billions of yen %of yen Growth rate (year-on-year) +8.4% 400 202,000 +7.7% 1.886.0 Projection for FY2012 16.9% 1,739.3 100.0 350 1,615.6 36.0 90.4 Africa Middle 14.1%1,600 61.5 36.4 192.0 East 13.6% 42.8 161.8 Middle East Africa 300 15 2% Japan 121.6 350.0 Oceania 5% Oceania 16% 252.9 319.4 10% 2501,200 Asia North 200.0 334.2 201.3 90.0 China Asia America 200 10 79.7 19% 14% 800 59.5 235.0 CIS Europe 205.2 320.0 202.2 120.6 120.0 Latin America China Latin 6% 150 104.4 11% CIS America 246.2 257.0 Europe 400 184.5 237.8 5% 12% 100 220.8 5 North America 251.5 286.3 306.0 Traditional Japan 50 0 Markets FY2010 FY2011 FY2012 (Projected) 36% 0 0 ¥85/USD ¥79/USD ¥80/USD FY2010 FY2011 FY2012 ¥113/EUR ¥110/EUR ¥105/EUR Strategic (Projected) ¥12.7/RMB ¥12.4/RMB ¥12.8/RMB Markets : Segment profit ratio 64% Sales before elimination of Sales growth rate (year-on-year basis) inter-segment transactions North Latin % Japan America Europe America CIS China Asia Oceania Middle East Africa Total FY2011 Results +13.8% +28.9% +15.5% +1.5% +34.0% (39.8)% +26.3% +33.1% (15.0)% +46.9% +7.7% FY2012 Projection +6.9% +8.1% (0.5)% +14.5% +12.8% (0.7)% +9.6% +18.6% (1.3)% +10.5% +8.4% 4
  5. 5. Projection for FY2012Construction, Mining & Utility Equipment: Causes of Difference in Projected Sales & Segment Profit - An increase in fixed costs should be compensated for by improvements of production costs and selling prices. - Coupled with an increase in the volume of sales and foreign exchange rate differences, we expect segment profit to increase by 73.7 billion yen from FY2011. Billions of yen Segment profit 400 Production, selling price 350 differences, etc. 320.0 Foreign 56.7 Volume [Positive factors] 300 Fixed costs exchange Difference 246.2 difference rate 25.0 - Reduced production costs and selling price difference (15.0) difference 7.0 and others: + 56.7 billion yen 250 - Volume difference: + 25.0 billion yen 200 - Foreign exchange rate difference: + 7.0 billion yen 150 +73.7 [Negative factors] billion yen - Fixed costs difference: -15.0 billion yen 100 Positive factors 50 Negative factors 0 FY2011 FY2012 Increased profit of + 73.7 billion yen (Results) (Projected) ¥ 79 /USD ¥ 80/USD ¥110/EUR ¥105/EUR ¥12.4/RMB ¥12.8/RMB 14.1% Segment profit ratio 16.9% 5
  6. 6. Projection for FY2012 Construction & Mining Equipment: Demand for 7 Major Products FY2011: While demand downturned drastically in China, that in other Strategic markets and Traditional Markets expanded, sustaining a growth rate of 4% comparable to FY2010. FY2012: Chinese demand should bottom out and demand in Strategic Markets other than China should continue to increase steadily. We project that global demand will increase by 5% to10% from FY2011. Quarterly demand for 7 major products Annual demand for 7 major productsUnits Growth rate Units150,000 90% Growth rate 600,000 60% Japan Japan North America North America 45% Europe China Europe 63% Others Growth rate China 500,000 40%120,000 60% Others 53% Index : FY2007=100 Growth rate 46% 101~106 40% 22% 100 36% 400,000 13% 16% 13% 96 20% 90,000 30% 15% 5~10% 17% 11% 4% 15%13% 92 13% 14% 300,000 80 0% 4% -3% 7% 60,000 0% 64 -6% 200,000 -20% -10% -20% -20% -33% 30,000 -30% 100,000 -40% -42% -49% -48% 0 -60% 0 -60% FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 07/4-6 07/7-9 07/10-12 08/1-3 08/4-6 08/7-9 08/10-12 09/1-3 09/4-6 09/7-9 09/10-12 10/1-3 10/4-6 10/7-9 10/10-12 11/1-3 11/4-6 11/7-9 11/10-12 12/1-3 (Estimated) (Estimated) (Projected) Estimated by Komatsu 6
  7. 7. Projection for FY2012 Construction & Mining Equipment: Demand in Major Markets and Outlook (1) Japan - In FY2011, demand increased sharply by 49%, fueled by restoration/reconstruction works in the earthquake-devastated regions. - Demand for new hydraulic excavators surpassed the number of used equipment exported from Japan, reflecting further decline in the amount of surplus machines on the market and an increase in demand after the earthquake. We project that demand will advance by 5% to 10% from FY2011. Demand for new equipment (7major products) Quarterly demand for 7 major products and construction investment Growth rate Index : FY07/4Q=100 UnitsConstruction investment Year-on-year growth rates of Demand of used equipment for new equipment/ 88 Exports 100% 15,000Trillions of yen 7 major products Units Property 80% 100 12,000 bubble FY11: +49% (estimated)100 80,000 60% 9,000 FY12 : +5% to +10% (projected) 40% 40 45 45 6,000 90 Demand for 60,000 20% 3,000 new equipment 0% 0 80 -20% -3,000 40,000 4Q: +96% -40% (estimated) -6,000 70 -60% -9,000 20,000 Exports of used Used equipment -80% Demand (Units) Growth rate -12,000 60 equipment bubble -100% -15,000 0 FY07 1Q 2Q 3Q 4Q FY08 1Q 2Q 3Q 4Q FY09 1Q 2Q 3Q 4Q FY10 1Q 2Q 3Q 4Q FY11 1Q 2Q 3Q 4Q 50 Construction investment and machine Demand for new -20,000 Population population for hydraulic excavator equipment/export Units Units 40 40 0000 Demand for new equipment > export 60000 -40,000 35 0000 Export of used Machine population has been increasing. 30 equipment 50000 30 0000 40000 -60,000 25 0000 20 20 0000 30000 Private-sector non-residential Private-sector residential -80,000 15 0000 New equipment 10 20000 Government construction 10 0000 Machine population 10000 0 -100,000 50000 0 0 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 11 12 FY FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 [Sources] : Construction investment by the Ministry of Land, Infrastructure, Transport & Tourism , (Estimated) (Projected) and Research Institute of Construction and Economy [Source]: FY02 to FY10: Japan Construction Equipment Manufacturers Association Demand for 7 major products estimated by Komatsu No. of used equipment estimated by Komatsu FY11,12: estimated by Komatsu 7
  8. 8. Projection for FY2012 Construction & Mining Equipment: Demand in Major Markets and Outlook (2) North America - In FY2011, demand expanded by 36% from FY2010, fueled by strong demand in the rental, mining and energy industries. Yet, it represents only about 60% of the last peak year of FY2005. - In FY2012, demand should remain brisk with an increase of 10% to 15% from FY2011. Demand for 7 major products and US housing starts Quarterly demand for 7 major products Growth Demand for rate Units Housing starts 7 major products Index : FY05/4Q=100 60% 30,000in ten thousands Units 250 6 yrs 9 yrs 11yrs 80,000 100 64 40% 91 20,000 Year-on-year growth rates 66 39 48 of 7 major products 70,000 20% 33 10,000 FY11: +36% (estimated) FY12: +10 to 15% (projected) 60,000 0% 0 200 4Q: +33% -20% -10,000 50,000 (estimated) -40% -20,000 40,000 Demand (Units) Growth rate 150 -60% -30,000 FY05 1Q 2Q 3Q 4Q FY06 1Q 2Q 3Q 4Q FY07 1Q 2Q 3Q 4Q FY08 1Q 2Q 3Q 4Q FY09 1Q 2Q 3Q 4Q FY10 1Q 2Q 3Q 4Q FY11 1Q 2Q 3Q 4Q 30,000 20,000 100 10,000 Breakdown of demand by segment (Unit based) 0 100% Units 45,000 Demand is recovering centering 13% 15% 16% 15% 14% Others Others +30% 50 on the rental, mining and energy -10,000 40,000 industries, while housing starts 80% 20% 21% 17% 35,000 24% 30% lacks full-recovery momentum. Rental -20,000 30,000 Rental +78% 60% 13% 13% 15% 14% 25,000 Mining & 0 -30,000 14% Mining & 19% energy +45% FY 40% 21% 27% 20,000 energy 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 11 12 23% 19% 15,000 Road Road +16% Housing starts Demand for mojor 7 products 20% 36% 10,000 28% 27% 24% 22% Construction 5,000 Construction +32% [Source]: Housing starts by U.S. Department of Commerce 0% 0 Demand for 7 major products estimated by Komatsu FY07 FY08 FY09 FY10 FY11 8 FY10 FY11
  9. 9. Projection for FY2012 Construction & Mining Equipment: Demand in Major Markets and Outlook (3) Europe - In FY2011, demand remained firm, centering on Germany, France and the United Kingdom, and increased by 7% from FY2010. Yet, it remained at about half of the last peak year of FY2007. - In FY2012, we project that demand will improve by 0% to 5%. Annual demand for 7 major products Quarterly demand for 7 major products Growth Index : FY07/4Q=100 Units Year-on-year growth rates of 7 major products rateUnits 60% 52 30,000 FY11: +7% (estimated) 10080,000 FY12: 0% to +5% (projected) 40% 50 20,000 38 36 20% 10,00070,000 0% 0 Other countries -20% 4Q: -4% -10,000 (estimated)60,000 Major 5 countries -40% -20,000 -60% Demand (Units9 Growth rate -30,00050,000 -80% -40,000 Other countries 4Q FY07 1Q 2Q 3Q 4Q FY08 1Q 2Q 3Q FY09 1Q 2Q 3Q 4Q FY10 1Q 2Q 3Q 4Q FY11 1Q 2Q 3Q 4Q40,000 Demand for 7 major products: Year-on-year growth rate30,000 Apr., 2010 – Apr., 2011 –20,000 Mar., 2011 Feb., 2012 Major 5 (Germany, France, Germany +67% +15% the U.K., Italy, Spain)10,000 U.K. +35% +6% France +48% +22% 0 Italy -2% -27% 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 FY Spain -4% -13% Estimated by Komatsu Others (29 countries) +40% +17% 9
  10. 10. Projection for FY2012 Construction & Mining Equipment: Demand in Major Markets and Outlook (4) China - In FY2011, demand dropped sharply by 37%, as adversely affected by the government’s credit squeeze measure. - We project that FY2012 demand will remain about flat (0% to +5%) from FY2011. Demand for hydraulic excavators (incl. mini models):Units Demand for 7 major products Local and foreign makers and used equipment imports150,000 (Foreign manufacturers only) [Units] 100% [Breakdown] Year-on-year growth rates of 7 major products 250000100,000 FY11: -37% (estimated) Foreign(Japan, U.S. and Europe) Foreign ( Korea) 80% 200000 FY12: 0% to +5% (projected) Local Used (imports) 50,000 60% 150000 100000 40% 0 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 50000 20% (Projected) Monthly demand for hydraulic excavators 0 0%Units24,000 (Foreign makers: Sum of 6-ton and larger models) FY06 FY07 FY08 FY09 FY10 FY11 FY06 FY07 FY08 FY09 FY10 FY11 FY2012 (Projected) <Chinese new year> : Feb. 10, 2013 % Urbanization rates 10020,000 : Jan. 23, 2012 FY2011 Construction rush of interstate highways : Feb. 3, 2011 90 in the U.S. (1950-1980) FY2010 Jan., 2012: down 57%16,000 FY2009 : Feb. 14, 2010 Feb., 2012: down 33% 80 U.S.A : Jan. 26, 2009 FY2008 Mar. 2012: down 56% 70 6012,000 Construction rush of high- Topped 50% in 2011 50 Japan speed railways in Japan (1970~1990) 40 Construction rush of expressways in Japan Construction rush of 8,000 (1960~1990) high-speed railways 30 in China (2005-2020) 20 China Construction rush of expressways in China (1990-2020) 4,000 10 Five-year plans 6 7 8 9 10 11 12 13 0 CY 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 0 Sources: * Urbanization rates: UN data 4 5 6 7 8 9 10 11 12 1 2 3 High-speed railways in China: “Mid-term Railway Network Plan” (revised in 2008), the Ministry of Railways of China ProjectionMonth Expressways in China: Mid to Long-term Plan for Transport Infrastructure Development” (announced in 2007), Estimated by Komatsu The National Development and Reform Commission of China 10
  11. 11. Projection for FY2012Construction & Mining Equipment: Demand in Major Markets and Outlook (6) Other Strategic Markets - In FY2011, demand expanded by 29% from FY2010, supported by strong demand for mining equipment, centering on Southeast Asia and Latin America. - We project that demand will remain firm in FY2012 with an increase of 5% to 10% from FY2011. Demand for 7 major products Quarterly demand for 7 major products in Southeast Asia Other Strategic markets: Southeast Asia, Latin America, India, Growth Demand (Units) Growth rate Units Africa, Middle East, CIS, Oceania and others rate 160% 12,000 Units Index : FY07/4Q=100 221 Year-on-year growth rates of 7 major products 112 120% 165 9,000 Others FY11: +29% (estimated) 100 80% 6,000120,000 FY12: +5% to +10% (projected) 59 Oceania 40% 3,000 Africa 0% 0 Middle East -40% 4Q: +33% -3,000 CIS (estimated) 90,000 -80% -6,000 FY07 1Q FY08 1Q FY09 1Q FY10 1Q FY11 1Q India 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q Latin America Southeast Asia 60,000 Quarterly demand for 7 major products in Latin America Growth Demand (Units) Growth rate (台数) Units rate 120% Index : FY07/4Q=100 9,000 74 101 98 30,000 100 80% 6,000 41 40% 3,000 0% 0 0 -40% 4Q: -3% -3,000 (estimated) 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 -80% -6,000 FY FY07 1Q FY08 1Q FY09 1Q FY10 1Q FY11 1Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q Estimated by Komatsu 11

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