KOMATSU LTD. Q4 FY2025 earnings call

1. Strategic growth plan pillars: create customer value through innovation (e.g., power agnostics truck, hydrogen fuel cell excavator test), drive growth and profitability (e.g., first major mining equipment order in Middle East, AHS deployment), transform business foundation (e.g., risk management, supply chain strengthening). 2. Achievements: net sales at record high for 5th year, ROE 11.3% achieving target, retail finance met ROA and net D/E ratio targets, CO2 reduction from production ahead of schedule. 3. Acquisitions and demonstrations: acquired remanufacturing business, conducted hydrogen fuel cell excavator demonstration, exhibited at trade show, acquired forestry machinery manufacturer, reached 1,000 units of ultra-large autonomous dumb truck

Construction, Mining & Utility Equipment: Net sales increased by 0.2% to JPY 3,806 billion, segment profit decreased by 18% to JPY 491.1 billion, segment profit ratio 12.9%. Retail finance: Sales increased by 2.4% to JPY 126.1 billion, segment profit increased by 24.4% to JPY 36.6 billion. Industrial Machinery and Others: Sales increased by 6.8% to JPY 238.8 billion, segment profit increased by 38.5% to JPY 37.9 billion

1. Fiscal 2026 forecast: net sales projected at JPY 4,118 billion (-0.4% y-o-y), operating income JPY 508 billion (-10.5% y-o-y), net income JPY 318 billion (-15.5% y-o-y). 2. Segment forecasts: Construction Machinery and Mining Equipment and Utilities segment revenue down 0.4% to JPY 3.79 trillion, segment profit down 10.4% to JPY 440 billion; Retail Finance segment revenue up 1.1% to JPY 127.5 billion, segment profit down 1.6% to JPY 36 billion; Industrial Machinery and Others segment revenue up 0.1% to JPY 239 billion, segment profit down 2.5% to JPY 37 billion. 3. Dividend and buyback: dividend per share JPY 190, same as previous year, plan to repurchase up to JPY 100 billion shares

1. Middle East situation: turmoil, soaring oil prices, supply chain disruptions may continue, impacting sales and costs. 2. U.S. tariffs: additional tariffs apply, with net cost increase factored in, and uncertainty around reciprocal tariffs and tariff rates. 3. Production risks: potential shortages of crude-oil-derived materials affecting production, impact unclear and not factored into guidance. 4. Market demand uncertainties: varying demand trends in different regions (Asia, Middle East, etc.) with potential for demand declines and uncertainties in demand recovery

Q: Regarding tariff impact and price increases, how does it affect fiscal '26?

A: U.S. tariffs impact on P&L, price increases needed globally.

Q: About volume in Middle East conflict, what's the assumption?

A: 60% decline in demand, cost increase due to Strait of Hormuz impact.

Q: Details of factors in segment profit variance?

A: Volume, product mix, cost factors including tariffs.

Q: CFO commitment as new CFO?

A: Focus on shareholder returns, balance sheet, ROE, supporting better top line.

Q: Mining equipment metal prices and aftermarket growth?

A: Metal prices high, aftermarket growth conservative due to regional impacts.

Q: Replacement cycle of mining equipment?

A: Short-term ups and downs, less large deals in 2026.

Q: Production impact from Middle East and tariffs?

A: Uncertainties, no incorporation into guidance yet.

Q: AHS units and margins?

A: Reached 1,000 units, margins from subscriptions positive