Komatsu Ltd S/Adr

This is Takeshi Horikoshi, CFO. I will explain the overview of the fiscal 24 Q2 business results. Page 4 shows the highlights for fiscal 24 Q2 on a three-month basis. The exchange rates were 152.4 yen to the dollar, 165.6 yen to the euro, and 101.5 yen to the Australian dollar. Compared to the same period last year, the yen weakened against the dollar, euro, and Australian dollar. Net sales increased by 9.2% year-on-year to 1 trillion 82 billion yen, while operating income decreased by 2.3% to 146.4 billion yen. The operating income ratio decreased by 1.7 points to 14.5%. Net sales increased due to the positive impact of a weaker yen and improved sales prices, but operating income decreased. due to the negative impact of increased costs and changes in product and regional mix, despite the positive impact of a weaker yen and improved sales prices. Net income decreased by 8.1% to 92 billion yen. Q2 net sales were the highest ever on a second quarter basis. On page 5, I will explain net sales and profits for each segment in Q2. Net sales in construction, mining, and utility equipment increased by 8.7% from the corresponding period a year ago to 935.9 billion yen, while segment profit decreased by 4.7% to 135.7 billion yen, and the segment profit ratio decreased by 2 points to 14.5%. Retail finance net sales increased by 27.2% from the corresponding period a year ago to 31.3 billion yen, and segment profit increased by 8% to 7.2 billion yen. Sales in the industrial machinery and other segment increased by 14.9% from the corresponding period a year ago to 51.2 billion yen and segment profit increased by 12.7% to 2.8 billion yen. I will explain the factors behind the changes in each segment later. Page 6 shows the sales by region in the construction, mining, and utility equipment segment. Net sales in the construction, mining, and utility equipment segment increased by 8.4% from the corresponding period a year ago to 933.2 billion yen. By region, sales increased in all regions except Europe and the Middle East, and sales in Oceania increased significantly due to increased sales of mining equipment. Out of the regions where sales increased, sales in North America, Latin America, and Africa decreased. when excluding currency impact.

Page 7 shows highlights for the first half of FY2024. FX rates were 153.9 yen to USD, 166.5 yen to EUR and 101.7 yen to AUD. Yen depreciated against USD, EUR and AUD year-on-year. Net sales increased by 8% year-on-year to 12,968.1 billion yen, operating income increased by 2.2% year-on-year to 303.4 billion yen, and operating income ratio was 15.4% down by 0.9 points year-on-year. Net income attributable to Commerce Limited decreased by 1.9% to 201.7 billion yen. Net sales, segment profit and operating income posted record highs for the first half. Intermediate dividend per share is 83 yen as initially planned. Ongoing cumulative donation and free-of-charge supply of construction equipment for the restoration from the Noto Peninsula disaster is 1 billion yen as of the end of September. Page 8 shows the segment sales and profit for the first half. Sales of construction, mining and utility equipment increased by 7.2% year-on-year to 1,830.2 billion yen. Segment profit decreased by 1% to 278 billion yen. Segment profit ratio was 15.2% down by 1.2 points. Sales of retail finance increased by 30.1% year-on-year to 61.8 billion yen, and segment profit increased by 14.1% to 14.8 billion yen. Sales of industrial machinery and others increased by 13.8% to 96.8 billion yen, and segment profit increased by 77.3% to 7.8 billion yen. I'll explain the causes of difference in each segment later.

Page 9 shows the sales results for the construction, mining, and utility equipment. In this section, the revenue actually went up by 7.1% year-on-year, ¥1,824,500,000. By region, North America, Latin America, Oceania. In these regions, actually, we had growth. But in Europe and in CIS and in Asia, we had a drop. Among the growth areas, the North American and the Latin American Africa, excluding the foreign exchange, actually, it came down. Page 10 shows actually the sales and segment profit in this construction, mining, and utility equipment. The sales side, the negative impact and decline in volume was overcome by the cheaper yen and also the sales price improvement. On a basis, it became 122.6 billion yen. In terms of segment profit, the weight of cheaper yen and also Then selling price improvement, we had a positive impact. But again, due to the decline in the volume and cost increase, as well as the change in the product mix, we suffered from the 2.8 billion yen decline year-on-year basis. Segment profit actually declined by 1.2 points, becoming 15.2%. Page 11 shows the status of the retail finance in the first half of the year. Although the new contracts increased, assets decreased year-on-year due to the impact of the yen's appreciation at the end of this fiscal year compared to the end of the previous fiscal year. New contracts increased year-on-year due to the positive impact of the weaker yen and an increase in the financing utilization rate. Sales increased by ¥14.3 billion year-on-year to ¥61.8 billion due to an increase in interest rates received, the positive impact of the weaker yen, an increase in financial receivables, and the segment profit increased by ¥1.8 billion year-on-year to ¥14.8 billion. Page 12 shows the sales and segment profit of the industrial machinery and others in the first half of the year. Sales increased by 13.8% eon-yen to 96.8 billion yen. Segment profit increased 77.3% eon-yen to 7.8 billion yen. And the segment profit ratio increased 2.9 points to 8.1%. In the automotive industry, sales increased mainly for large presses and machine tools. And in the semiconductor industry, sales of Exmon laser maintenance recovered resulted in increased revenue and profit. Now please refer to page 13 for the consolidated balance sheet. Total assets were 5 trillion and 558.6 billion yen, down 78 billion yen from the end of previous year, mainly due to the appreciation of the yen at the end of the fiscal year compared to the end of the previous fiscal year. Inventories increased 18 billion yen from the end of the previous fiscal year, mainly due to the increased inventory for mining equipment. The shareholder security ratio was 52.8%, down 1 point from the end of the previous fiscal year. The repurchase of Treasury stocks resolved at the Board of Directors meeting on April 26, 2024, was completed by August 8, 2024, with the acquisition of 100 billion yen worth of Treasury stock. Shareholder's equity as of the end of September includes the impact of the repurchase of the Treasury stock. Net DE ratio was 0.29. That's all from me.