Komatsu Ltd S/Adr

This is Horikoshi, the CFO. I will go through the overview of the business results for Q3 fiscal 24. On page 4 are highlights for Q3 on a three-month basis. Exchange rates were 148.8 yen to the dollar, 161.4 yen to the euro, and 99 yen to the Australian dollar. Year-on-year, the yen spent in against the dollar was but weakened against the Euro and Australian dollar. Net sales increased by 1.8% year-on-year to 989.2 billion yen, and operating income increased by 4% to 162.6 billion. The operating income ratio went up by 0.3 points to 16.4%. Net income increased by 9.7%, to 108.3 billion yen. Net sales and net income were third quarter record highs. Segment profit, operating income, and the operating income ratio were the highest ever for a quarter. On page five, I will go through segment sales and profits for Q3 on a three-month basis. Sales of construction, mining, and utility were 918.2 billion yen, broadly flat from the corresponding period a year ago. Segment profits decreased by 1.4% to 147 billion yen, and the segment profit ratio went down by 0.2 points to 16%. Retail finance sales increased by 11.1% year-on-year to 30.2 billion yen, and segment profits increased by 22.3% to 7 billion yen. Industrial machinery and others net sales increased by 7.5% year-on-year to 49.9 billion yen and segment profit increased by about 5.7 times year-on-year to 7.3 billion yen. I will explain the factors behind the changes in each segment later. Page six shows the sales by region in the construction, mining, and equipment segment For the three months of Q3, net sales in the construction mining equipment segment increased by 1.3% year-on-year to 916.1 billion yen. By region, sales increased in Oceania, where sales of mining equipment increased, and in Asia, where demand recovered in Indonesia, but decreased in the Middle East, Africa, Japan, and other regions. Page 7 shows the highlights for fiscal 2423 on a nine-month basis. The exchange rates were 152.2 yen to the dollar, 164.8 yen to the euro, and 100.8 yen to the Australian dollar. Year over year, the yen weakened against the U.S. dollar, euro, and Australian dollar. Net sales increased by 5.8% year on year. to 2,957.3 billion yen. And operating income increased by 2.8% to 466.1 billion yen. The operating income ratio decreased by 0.4 points to 15.8%. Net income increased by 1.9% to 310.1 billion yen. Net sales segment income, operating income, and net income were record highs for Q3 on a cumulative basis. And also for that noto reconstruction, we have been providing our equipment free of use. On a cumulative basis, the impact has been 1.2 billion yen as a result. On page 8, I will explain the net sales and income for each segment for Q3 on a nine-month basis. Sales of construction, mining, and utility equipment increased by 4.7% year-on-year to 2,748.4 billion yen, while segment profit decreased by 1.1% to 425 billion yen, and the segment profit ratio decreased by 0.9 points to 15.5%. Retail finance sales increased by 23.2% year-on-year to 92 billion yen and segment profit increased by 16.6% to 21.8 billion yen. Sales of industrial machinery and others increased by 11.6% year-on-year to 146.7 billion yen and segment profit increased by approximately 2.6 times year-on-year to 15.1 billion yen. I'll explain the factors behind the changes in each segment later.

Page 9 shows sales by region in the construction, mining, and utility equipment segment for the third quarter nine months year-to-date. Net sales of construction, mining, and utility equipment increased 5.1% year-on-year to 740.6 billion yen. By region, its sales increased North America, Latin America, and Oceania, while they did decrease in Europe, Japan, and the Middle East. Of the regions where sales increased, sales in North America, Latin America, CIS, and Africa decreased on a constant currency basis. Page then shared the factors behind an increase or decrease in net sales and segment income of the construction, mining, and utility equipment segment in the third quarter nine months here to date. Net sales increased by 122.6 billion yen from the same period of the previous year as a positive impact of weaker yen and improved selling prices outweighed a negative impact of decrease in volume. Segment income decreased by 4.9 billion yen from the same period of the previous year due to the negative impact of lower volume, higher cost of goods sold and fixed costs, and the negative impact of mix, despite the positive impact of weaker yen and sales price improvement. Segment profit margin declined 0.9 percentage points from the same period last year to 15.5%. Page 11 shows the status of retail finance for the third quarter nine months here today. Assets increased from the end of the previous fiscal year due to an increase in new contracts and the effect of weaker yen at the end of the period under review compared to the end of the previous fiscal year. New contracts increased year-on-year mainly due to the impact of yen depreciation. Net sales increased by 17.3 billion yen year-on-year to 92 billion yen mainly due to higher interest rate rates received, the positive impact of yen depreciation, and an increase in financing receivables. Segment income increased 3.1 billion yen to 21.8 billion yen. Page 12 shows sales and segment income of the industrial machinery and other segments for the third quarter nine months here today. Net sales increased 11.6% year-on-year to 146.7 billion yen. Segment income was 15.1 billion yen, up 2.6 times approximately from the same period last year, and segment profit margin rose 6 percentage points to 10.3%. In the automotive industry, sales of large presses and machine tools increased, and in semiconductor industry, maintenance sales of ex-sino lasers recovered, pushing up on its sales and profits. I'll explain now the consolidated balance sheet on page 13. Total assets for 5,919.2 billion yen, an increase of 282.6 billion yen from the end of the previous fiscal year, mainly due to an increase in working capital and an impact of yen depreciation at the end of the current period compared to the end of the previous fiscal year. Inventories increased by 126.9 billion yen from the end of the previous fiscal year, because the impact of weaker yen and increasing inventories for mining equipment. Shareholder's equity ratio decreased by 1 percentage point from the end of the previous fiscal year to 52.8%. The acquisition of treasury stock, which was resolved at the Board of Directors meeting held on April 26, 2024, was completed by August 8, 2024, amounting to 100 billion yen. In addition, the company completed the acquisition of 100 billion yen worth of its own shares by August 8, 2024. On October 30, 2024, we canceled 22,857,500 shares acquired this time. This is equivalent to 2.35% of the total number of shares issued and outstanding before the cancellation. Net DE ratio is 0.31. This concludes my part.

Next, Mr. Hishinuma will talk about the projections for fiscal 24. I am Hishinuma, General Manager of the Business Coordination Department. I will explain the projection for fiscal 24 and the conditions in major markets. Page 15 is an outline of a projection for fiscal 24. The projection for fiscal 24 has not changed from the October outlook. From page 16, I'll go through the demand trends and outlook for the seven major products. Demand trends for the seven major products, inclusive of line equipment, are shown here. Fiscal 24 Q3 numbers are preliminary estimates by our company. It appears that demand in Fiscal 24 Q3 decreased by 2% year-on-year. The demand forecast for Fiscal 24 is unchanged. from the October forecast with a decrease of 5% to 10% year-on-year. The subsequent pages explain the conditions in the major markets. Page 17 shows the demand trends and forecasts for the Japanese market. Demand in Fiscal 24 Q3 apparently decreased by 12% year-on-year, mainly due to decreased demand in rental Fiscal 24 foliar demand has been revised down from the October forecast to 0% to minus 5% year-on-year. Page 18 shows the demand trends outlook for the North American market. Demand for fiscal 24 Q3 apparently increased by 3% year-on-year. Although demand for rental energy decreased, Demand for infrastructure remains steady. The full-year demand forecast for fiscal 24 has been revised from the October forecast and is now expected to be minus 5 to minus 10% year-on-year. With the inauguration of the second Trump administration in January, we will continue to monitor impact on demand of future policies. Page 19 shows the trends and outlook for demand in Europe. Demand in Fiscal 24 Q3 appears to have decreased by 20% year-on-year. Demand for construction equipment decreased, mainly in major markets such as Germany, the UK, and France. The demand forecast for Fiscal 24 on a full-year basis is minus 10 to minus 15% year-on-year, with no change from the October outlook. In Europe, interest rates have been cut continuously since June last year, but there are no signs of a recovery in business confidence or demand. The political situation across countries are also in a turmoil, and we will continue to monitor future developments. Page 20 shows the demand trends and forecasts for the Chinese market. This page shows the trend demand for hydraulic excavators, excluding many excavators. For reference, the trend in demand inclusive of Chinese manufacturers are also presented here. The growth rate in demand shows the figures for foreign manufacturers. It appears that demand in the third quarter of fiscal 24 increased by 26% compared to the same period last year. In addition, it appears that total demand including Chinese manufacturers increased by 21% compared to the same period last year. The forecast for demand for the full year of fiscal 24 has been revised from the October forecast and is now expected to be plus 10 to plus 20% year-on-year. The forecast for total demand, including Chinese manufacturers, is also expected to be plus 10 to plus 20% year-on-year, and this has not changed from the October forecast. Although there has been a reversal in demand, There has been no change in the situation of stagnant economic activity due to factors such as a slump in the real estate market, and we'll continue to monitor the situation. Page 21 shows the demand trends and outlooks of the Southeast Asian market. Demand in the third quarter of fiscal 24 appears to have increased by 16% year-on-year. In Indonesia, the largest market, demand for general construction equipment has recovered since the second quarter and is currently exceeding the same during last year. In addition, coal prices in Indonesia have remained firm and the outlook for demand for mining equipment is expected to be the same as the previous year for the full year. The outlook for demand in fiscal 24 is unchanged from the forecast in October with a year-on-year change of 0% to 5%.