Business Results for FY2017 - home.komatsu · 4/26/2018 · ・Retail Finance: Revenues increased...

1

April 26, 2018

President and CEOExecutive Officer and CFOExecutive Officer andGeneral Manager of Business Coordination Department

Tetsuji Ohashi Takeshi HorikoshiTakuya Imayoshi

Komatsu Ltd. Participants

Business Results for FY2017(April 1, 2017 – March 31, 2018)

2Contents

1. Business Results for FY2017: PP4 - 12

2. Projection for FY2018 Business Results: PP14 - 31

PP4-5 PP6-7 P8P9 P10PP11-12

Projection for FY2018 Results: Highlights, Segment Sales and Profit Construction, Mining & Utility Equipment: Projection of Segment Sales and Profit . KMC’s Business ResultsRetail Finance: Outlook of Assets and Revenues Industrial Machinery & Others: Projection of Segment Sales and Profit Construction, Mining & Utility Equipment: Actual and Projected Demand for Seven Major Products(Global and By Region)Construction, Mining & Utility Equipment: Demand for and Sales of Mining EquipmentConstruction, Mining & Utility Equipment: Projected Sales of PartsProjection for Capital Expenditures, Depreciation, R&D Expenses and Fixed Costs

PP14-15PP16-19P20P21PP22-27

PP28-29P30P31

Highlights: Segment Sales and Profits for FY2017Construction, Mining & Utility Equipment: Results for FY2017Retail Finance Business: Assets, Revenues and Segment Profit for FY2017Industrial Machinery & Others: Results for FY2017Consolidated Balance SheetsProgress towards Mid-Range Management Targets

Appendix: PP33 - 43

Quarterly ResultsBook-to-Bill Ratio [Orders Received / Sales (6 Months)]Highlights: Segment Sales and Profit for the Fourth Quarter of FY2017 (January – March 2018)

PP33-37PP38-40PP41-43

3

1. Business Results for FY2017

4Highlights of FY2017 Business Results

FY2017 Projection

(As of Oct.,2017)

FY2017 Results

Depreciation after PPA * (40.0) (40.2)

Integration expenses etc. (6.0) (7.5)

Total (46.0) (47.8)

Note: PPA stands for Purchase Price Allocation.It is an accounting process of valuating and allocating acquired assets and liabilities to fair prices.

Notes:

1) Figures represent those which KMC’s business results are excluded

2) KMC’s segment and operating losses include temporary expenses in the table on the right.

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

FY2016Results

(A)FY2017

Projection(B)

FY2017Results

(C)

Changes (C-A)

KomatsuConventional KMC Komatsu

ConventionalKMC increase

(decrease)Change

%

Net sales 1,802.9 2,328.0 2,037.0 291.0 2,501.1 2,183.2 317.8 +698.1 +38.7%

Segment profit (loss) 176.5 236.0 256.0 (20.0) 302.9 315.4 (12.4) +126.3 +71.6%

Other operating income( expenses) (2.4) (20.0) (20.0) - (31.3) (31.3) (0.0) (28.9) -

Operating income (loss) 174.0 216.0 236.0 (20.0) 271.5 284.0 (12.4) +97.4 +56.0%

Profit ratio (loss ratio) 9.7% 9.3% 11.6% (6.9)% 10.9% 13.0% (3.9)% +1.2pts. -

Other income (expenses) (7.6) 21.0 20.2 +27.8 -

Income before income taxes 166.4 237.0 291.8 +125.3 +75.3%

Net income 113.3 159.0 196.4 +83.0 +73.2%

ROE 7.3% 10.1% 12.1% +4.8pts.

Cash dividends per share 58yen 72yen 84yen 26yen

Consolidated payout ratio 48.2% 42.7% 40.3%

*3

Billions of yen

Net D/E ratio 0.18 - 0.40 +0.22pts.

¥108.6/USD¥119.3/EUR¥16.2/RMB

¥108.0/USD¥124.4/EUR¥16.0/RMB

¥111.2/USD¥129.6/EUR¥16.8/RMB *1

*2

*2

*2

*2

*1

(As of Oct.,2017)

Billions of yen

・Consolidated net sales increased by 38.7% from FY2016 to JPY2,501.1billion.・Operating income advanced by 56.0% to JPY271.5billion. Operating income ratio increased by 1.2 points to 10.9%.・Net income attributable to Komatsu Ltd. improved by 73.2% to JPY196.4 billion.

5

FY2016Results

(A)

FY2017Projection

(B)(As of Oct.,2017)

FY2017Results

(C)

Changes (C-A)


Conventional KMC increase(decrease) % Change

Net sales 1,802.9 2,328.0 2,037.0 291.0 2,501.1 2,183.2 317.8 +698.1 +38.7％

Construction, mining & utility equipment

Retail finance

Industrial machinery & others

1,576.5[1,566.3]

49.0[46.7] 191.0

[189.9]

2,106.0[2,092.0]

57.5[49.0]188.0

[187.0]

1,815.0[1,801.0]

57.5[49.0]188.0

[187.0]

291.0[291.0]

-

-

2,280.9[2,267.3]

60.3[49.6] 185.4

[184.1]

1,963.1[1,949.4]

60.3[49.6] 185.4

[184.1]

317.8[317.8]

-

-

+704.3[+700.9]

+11.2[+2.9]

(5.6)[(5.8)]

+44.7%[+44.8%]

+22.8%[+6.3%]

(2.9)%[(3.1)%]

Elimination (13.7) (23.5) (23.5) - (25.5) (25.5) - (11.8) -

Segment profit 176.5 236.0 256.0 (20.0) 302.9 315.4 (12.4) +126.3 +71.6 %

Construction, mining & utility equipment

Retail finance


161.6

4.4

12.4

215.0

11.0

12.5

235.0

11.0

12.5

(20.0)

-

-

275.9

12.9

14.4

288.4

12.9

14.4

(12.4)

-

-

+114.2

+8.5

+1.9

+70.7%

+191.1%

+16.0%

Corporate & elimination (2.0) (2.5) (2.5) - (0.4) (0.4) - +1.6 -

Billions of yen

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

Segment Sales and Profit for FY2017

14.4%

21.5%

7.8%

14.7%

(3.9)%

(3.9)% 10.2%

19.1%

6.6%

10.1% 12.6%

19.1%

6.6%

12.9%

(6.9)%

(6.9)% 10.3%

9.1%

9.8%

6.5%

12.1%

21.5%

7.8%

12.1%

・Construction, Mining & Utility Equipment: Sales advanced by 44.7% from FY2016, to JPY2,280.9 billion. Segment profit expanded by 70.7% to JPY275.9 billion. Segment profit ratio improved by 1.8 points to 12.1%.

・Retail Finance: Revenues increased by 22.8% to JPY60.3 billion. Segment profit improved by 191.1% to JPY12.9 billion. ・Industrial Machinery & Others: Sales amounted to JPY185.4 billion, down 2.9% from FY2016. Segment profit advanced by 16.0% to JPY14.4

billion.

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

Both sales and profit expanded, supported by advanced sales, especially in North America, China, Asia, as well as the benefits of the new addition of KMC to consolidated accounting.

■ Retail Finance:Both revenues and profit increased, mainly reflecting increased assets in North America.

■ Industrial Machinery & OthersSales declined from FY2016. Profit expanded, mainly supported by increased sales of machine tools to the automobile manufacturing industry.

6

+383.1[+24.5%]

+14.1〔+4.7%〕

+64.8〔+19.2%〕

+30.8〔+22.8%〕

+38.3〔+18.9%〕

+32.2〔+45.8 %〕

+52.3〔+53.8%〕

+88.0〔+42.6%〕

+35.1〔+33.3%〕

+3.5〔+9.8%〕

+23.4〔+32.6%〕

Japan Japan Japan

North America

North America

North America

EuropeEurope

EuropeLatin

America

Latin America

Latin America

CIS

CIS

CIS

China

China

China

Asia

Asia

Asia

Oceania

Oceania

Oceania

Middle East

Middle East

Middle East

Africa

Africa

Africa

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

2,400

FY2016 FY2017(Conventional)

FY2017(including KMC)

Billions of yen Japan North America Europe Latin

America CIS China Asia Oceania Middle East Africa Total

FY2016 301.5 338.4 135.5 202.9 70.5 97.3 206.6 105.6 35.8 71.8 1,566.3

KomatsuConventional 315.6 403.2 166.4 241.3 102.7 149.7 294.6 140.8 39.3 95.3 1,949.4

increase(decrease) +14.1 +64.8 +30.8 +38.3 +32.2 +52.3 +88.0 +35.1 +3.5 +23.4 +383.1

KMC 0.0 134.9 14.0 73.3 5.7 15.0 3.9 41.1 0.2 29.3 317.8

FY2017 315.6 538.2 180.4 314.7 108.5 164.7 298.6 181.9 39.5 124.6 2,267.3

1,949.4

1,566.3

PlusMinus

FY2017Conventional

FY2016

YoY Comparison (Conventional）

Traditional Markets Strategic Markets

19%

22%

9%

13%

6%

13%

21%

16%

15%

5%

TraditionalMarkets50%

Strategic Markets50%

Billions of yen

9%

2%13%

14%

12%




1,949.4

2,267.3

14%

8%7% 5%

7%

8%

24%

4%

7%

5%

2%5%


1,566.3

Construction, Mining & Utility Equipment: Sales by Region for FY2017 (To Outside Customers)

2%

8%

5%

・Sales to outside customers advanced by 44.8% from FY2016, to JPY2,267.3 billion. When KMC’s sales are excluded, sales increased by 24.5% to JPY1,949.4 billion.

・Excluding those of KMC, sales improved in all regions. Sales expanded sharply, especially in North America, China and Asia. ・The ratio of sales in Strategic Markets increased to 55% of total sales. (The ratio of Strategic Market was also 54%, when KMC’s sales were

included.)

7

1,576.5

2,280.9

1,000

1,500

2,000

2,500

FY16 FY17

¥111.2/USD¥129.6/EUR¥16.8/RMB

SalesFY2016 vs. FY2017

Segment profitFY2016 vs. FY2017

Billions of yen

Volume+300.9

Selling price+8.4

Foreign exchange rate

+66.0 Volume, product mix,

etc. +111.7

Fixed costs(0.1)

Selling price+8.4

Foreign exchange rate

+6.0

12.1%10.3% Segment profit ratio

+704.3 billion yen

Positive factorsNegative factor

Construction, Mining & Utility Equipment: Causes of Difference in Sales and Segment Profit for FY2017

¥108.6/USD¥119.3/EUR¥16.2/RMB

*1: Including JPY317.8 billion resulting from the new addition of KMC to consolidated accounting

*2: Including JPY(12.4) billion resulting from the new addition of KMC to consolidated accounting.

*1New addition to consolidation

329.0 *2New addition to consolidation

(11.8)

Billions of yen

161.6

275.9

0

100

200

300

400

FY16 FY17

+114.2 billion yen


・FY2017 sales increased by JPY704.3 billion from FY2016, supported by increased volume of sales, the positive factor of foreign exchange rates and the benefits of the new addition of KMC to consolidated accounting. Although segment profit was adversely affected by temporary expenses of KMC, it increased by JPY114.2 billion as a whole.

・Segment profit ratio improved by 1.8 points to 12.1%.

8

Japan JapanEurope EuropeChina ChinaOceania OceaniaOthers Others

North America

North America

0

100

200

300

400

500

600

700

800

49.0

60.3

4.412.9

0

10

20

30

40

50

60

70Sales Segment profit728.5

FY2017FY2016

Billions of yen Billions of yen

Mar 31, 2017 Mar 31, 2018

Billions of yen 2017/3E 2018/3E Changes

Interest-bearing debt 506.0 546.0 +40.0

Interest-bearing debt, net 501.2 542.6 +41.4

Net D/E ratio 3.65 3.50 (0.15)pts.

FY2016 FY2017 Changes

ROA 0.7% 1.9% 1.2%

RevenuesFY2016 vs. FY2017

AssetsMar 31, 2017 vs. Mar 31, 2018

Retail Finance Business: Assets, Revenues and Segment Profit for FY2017

671.5

¥108.6/USD¥119.3/EUR¥16.2/RMB

¥112.2/USD¥119.8/EUR¥16.3/RMB

¥106.3/USD¥131.0/EUR¥17.0/RMB

¥111.2/USD¥129.6/EUR¥16.8/RMB

・Assets increased, mainly due to increased sales of equipment, especially in North America.・Segment profit improved, mainly supported by no more adverse effects of allowance for doubtful accounts

recorded in China for FY2016.

9

191.0 185.4

0

100

200

FY2016 FY2017

（%）

12.4 14.4

6.5% 7.8%

-10

-5

0

5

10

05

1015202530

FY2016 FY2017

Sales Segment profitBillions of yen

Billions of yen :Segment profit ratio

Industrial Machinery & Others: Sales and Segment for FY2017

FY2016 FY2017 Changes

increase(decrease)

Change %

Komatsu Industries Corp., etc.[total of press and sheet-metal machines] 56.6 51.4 (5.1) (9.1)%

Komatsu NTC Ltd.[represented by wire saws]

55.2[10.7]

62.9[8.6]

+7.7(1.9)

+14.0%[(18.6)%]

Gigaphoton 32.0 37.1 +5.1 +15.9%

Others 47.0 33.7 (13.2) (28.2)%

Total 191.0 185.4 (5.6) (2.9)%

Billions of yen

Breakdown of sales

・Sales declined by 2.9% to at JPY185.4.・ Segment profit increased, mainly due to increased sales of machine tools to the automobile manufacturing industry.

Segment profit ratio was 7.8%.

10

Mar. 31, 2017 Mar. 31, 2018increase

(decrease)

Cash & deposits (incl. time deposits) [a] 122.1 146.8 +24.6Accounts receivable (incl. long-term trade receivables)

933.2 1,155.0 +221.8

Inventories 533.8 730.2 +196.3Tangible fixed assets 679.0 740.5 +61.5Other assets 388.1 599.7 +211.6Total assets 2,656.4 3,372.5 +716.0Accounts payable 240.1 303.5 +63.4Interest-bearing debt [b] 408.7 810.5 +401.8Other liabilities 359.1 514.7 155.6Total liabilities 1,007.9 1,628.9 620.9[Shareholders’ equity ratio] [59.4%] [49.4%] [ (10.0)pts. ]Komatsu Ltd. shareholders’ equity 1,576.6 1,664.5 +87.8Non-controlling interests 71.8 79.0 +7.2Liabilities & Equity 2,656.4 3,372.5 +716.0

Billions of yen

Interest-bearing debt, net [b-a] 286.5 663.7 +377.2

Net D/E ratio (excl. the retail finance business)

Consolidated Balance Sheets

¥106.3/USD¥131.0/EUR¥17.0/RMB

¥112.2/USD¥119.8/EUR¥16.3/RMB

Mar. 31, 2018Affect of new

addition of KMC to consolidation

16.677.6

114.677.9

251.3538.231.0

101.5111.2243.7

・Total assets grew by JPY716.0 billion from the previous fiscal year-end, affected by the new addition of KMC to consolidated accounting and increased inventories.

・Interest-bearing debt increased by JPY401.8 billion to JPY810.5 billion, mainly affected by the acquisition of KMC.・ Komatsu Ltd. shareholders’ equity ratio declined by 10.0 points to 49.4%.

: Net D/E ratio

0.18 0.40

(0.15) 0.08

11

126 121 113 108 114 117 114 101 93 85 79 85 100 110 121 109 111 111

6090

120150FOREX

(JPY/USD)

SalesBn JPY

Operating IncomeBn JPY

Business Results and Progress towards Mid-Range Management Targets

[Targets]

TargetFY2016 FY2017

Index Results Results

Growth • Aim at a growth rate above the industry’s average. Growth rate of Sales【VS FY2015】 (2.8)% 38.7%

【34.8%】

Profitability • Aim at an Industry’s top-level operating income ratio. Operating Income Ratio 9.7% 10.9%

Efficiency • Aim at 10%-level ROE. ROE 7.3% 12.1%

Shareholder return

• Keep a fair balance between investment for growth and shareholder return (incl. stock buyback), while placing main priority on investment.

• Set the goal of a consolidated payout ratio of 40% or higher, and maintain the policy of not decreasing dividends as long as the ratio does not surpass 60%.

consolidated payout ratio 48.2% 40.3%

Financial position • Aim at industry’s top-level financial position. net D/E ratio 0.18 0.40

1,035.8 1,027.2 1,127.3 1,356.0

1,612.1 1,893.3 2,243.0

2,021.7 1,431.5

1,843.1 1,981.7 1,884.9 1,953.6 1,978.6 1,854.9 1,802.9 2,183.2

2,501.1

(13.2)23.9 29.8 95.8 163.4

244.7 332.8

151.9 67.0

222.9 256.3 211.6 240.4 242.0 208.5 174.0 284.0 271.5

-1500150300450600750900

-5000

5001,0001,5002,0002,5003,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2017

Net sales (left scale)Operting income (right scale)

Retail finance Business

• ROA: 2.0% or above ROA 0.7% 1.9%

・5.0 or under for net debt-to-equity ratio net D/E ratio 3.65 3.50

Including KMC

-1.3%2.3% 2.6% 7.1% 10.1% 12.9% 14.8% 7.5% 4.7% 12.1% 12.9% 11.2% 12.3% 12.2% 11.2% 9.7% 13.0% 10.9%

Conventional

We made good progress towards the targets in the second year of the mid-range management plan.

12

Three strategies Progress Specific efforts

1. Growth strategies based on innovation

Achieved

• Broadened the range of intelligent Machine Control models.• Introduced SMARTCONSTRUCTION to more jobsites (over 5,000 jobsites in Japan: cumulative)• Jointly with NTT DOCOMO INC., SAP Japan Co., Ltd. and OPTiM Corporation, Komatsu planed and

managed the new platform “LANDLOG” which connects the entire production processes of construction.

• Achieved over 100 units of the Autonomous Haulage System in operation. • Developed add-on kits which convert manned dump trucks to unmanned ones.

Tasksahead

• Further reinforced and expanded SMARTCONSTRUCTION.• EUV light source* and new products to be developed by Gigaphoton.• To develop next-generation KOMTRAX.

2. Growth strategies of existing businesses

Achieved

• Developed and introduced models compliant with the latest emission controls. • Increased sales of parts by means of M&A.• Expanded curriculum for the Asia Training & Demonstration Center.• Acquired the forest machine attachment business in Canada.

Tasksahead

• To promote integration with KMC.• To continue strengthening involvement in the aggregate and cement sector.• To further strengthen and expand the value chain, including rental, used equipment and retail

finance businesses.

3. Reforms designed to reinforce the business foundation

Achieved

• Made steady efforts for cost improvement. • Reformed global spare parts operation. • Three domestic sales companies merged (i.e., Komatsu Construction Equipment Sales and

Service Japan Ltd., Komatsu Rental Ltd. and Komatsu Forklift Japan Ltd.

Tasksahead

• ICT-driven work reforms (incl. work style reforms)• To further promote cost improvement efforts.• To promote human resource development and diversity on a global scale.

Progress Made in the Management Plan and Tasks in Next Fiscal Year

* : EUV stands for Extreme Ultraviolet, and EUV light source is one of the next-generation semiconductor manufacturing technologies.

13

2. Projection for FY2018 Business Results

14

FY2017 Results(A)

FY2018 Projection(B)

Changes (B-A)


Conventional KMC increase(decrease)

Change %

Net sales 2,501.1 2,183.2 317.8 2.503.0 2,188.0 315.0 ＋1.9 ＋0.1%

Segment profit (loss) 302.9 315.4 (12.4) 345.0 319.5 25.5 +42.1 +13.9%

Other operating income (expenses) (31.3) (31.3) (0.0) (6.0) (6.0) - +25.3 -

Operating income (loss) 271.5 284.0 (12.4) 339.0 313.5 25.5 +67.5 +24.8%

Profit ratio (loss ratio) 10.9% 13.0% (3.9)% 13.5% 14.3% 8.1% +2.7pts. -

Other income (expenses) 20.2 (19.0) (39.2) -

Income before income taxes 291.8 320.0 +28.2 +9.7%

Net income *3 196.4 226.0 +29.6 +15.1%

Billions of yen

Outline of Projection for FY2018

ROE 12.1% 13.4% 1.3pts.

Cash dividends per share 84yen 96yen +12yen

Consolidated payout ratio 40.3% 40.1% -

*1


Notes 1) Figures represent those which KMC’s business Results are excluded2) KMC’s segment and operating income (losse) include temporary expenses in the table on the right.3) Upon adoption of ASC 810, “Net income” is equivalent to “Net income attributable to Komatsu Ltd.

¥100.0/USD¥123.0/EUR¥15.8/RMB

¥111.2/USD¥129.6/EUR¥16.8/RMB *1

*2

*2

FY2017Results

FY2018 Projection

Depreciation after PPA * (40.２) (8.0)

Integration expenses etc. (7.5) (2.５)

Total (47.8) (10.５)

*2

*2

Billions of yen

・ Consolidated net sales will remain about flat at JPY2,503.0 billion from FY2017.・ Operating income will increase by 24.8% to JPY339.0 billion. Operating income ratio will be 13.5%, an improvement of 2.7 points.・ Net income will increase by 15.1% to JPY226.0 billion.

15

FY2017Results

FY2018Projection

Changes


Conventional KMC increase(decrease) % Change

Net sales 2,501.1 2,183.2 317.8 2,503.0 2,188.0 315.0 ＋1.9 ＋0.1％

Construction, mining & utility equipmentRetail finance


2,280.9[2,267.3]

60.3[49.6]185.4

[184.1]

1,963.1[1949.4]

60.3[49.6] 185.4

[184.1]

317.8[317.8]

-

-

2,270.0[2,249.0]

53.0[48.0] 208.0

[206.0]

1,955.0[1,934.0]

53.0[48.0] 208.0

[206.0]

315.0[315.0]

-

-

(10.9)[(18.3)]

(7.3)[(1.6)]+22.6

[+21.9]

(0.5)%[(0.8)%](12.1)%[(3.3%)]+12.2%

[+11.9%]

Elimination (25.5) (25.5) - (28.0) (28.0) - (2.5) -

Segment profit 302.9 315.4 (12.4) 345.0 319.5 25.5 +42.1 +13.9%

Construction, mining & utility equipmentRetail financeIndustrial machinery & others

275.9

12.914.4

288.4

12.914.4

(12.4)

--

318.0

12.018.0

292.5

12.018.0

25.5

--

+42.1

(0.9)+3.6

+15.2%

(7.4)%+24.5%

Corporate & elimination (0.4) (0.4) - (3.0) (3.0) - (2.6) -

14.7%

21.5%

14.4%

12.1 %

21.5%

12.1%

7.8% 7.8%

Billions of yen


(3.9)%

(3.9)%

Projection for Segment Sales and Profit of FY2018

8.1%

8.1%

15.0%

22.7%

14.6%

14.0%

22.7%

13.8%

8.7% 8.7%

¥111.2/USD¥129.6/EUR¥16.8/RMB

¥100.0 /USD¥123.0/EUR¥15.8/RMB

・Construction, Mining & Utility Equipment: Sales will decline by 0.5% to JPY2,270.0 billion, while segment profit should advance by 15.2% to JPY318.0 billion. Segment profit ratio should improve by 1.9 points to 14.0%.

・Retail Finance: Revenues will decline by 12.1% to JPY53.0 billion. Segment profit will also decrease by 7.4% to JPY12.0 billion.・Industrial Machinery & Others: Sales will increase by 12.2% to JPY208.0 billion.. Segment profit should advance by 24.5% to JPY18.0 billion.

Conditions of three business segments:■ Construction, Mining & Utility Equipment・ Although we anticipate increased sales and price hikes especially in Strategic Markets, sales should remain flat from FY2017 as adversely affected by foreign

exchange rates. Segment profit should improve, supported b a sharp drop of adverse effects related to temporary expenses of KMC as well as an increase of volume of sales and price hikes by conventional Komatsu.

■ Retail Finance・While assets should increase in North America, both revenues and segment profit will decline, as adversely affected by foreign exchange rates. ■ Industrial Machinery & Others・We project both sales and segment profit will improve, supported by increased sales of machine tools and market introduction of new Servo presses.

16

Japan Japan

North America North

America

Europe Europe

Latin America Latin

America

CISCIS

ChinaChina

Asia Asia

Oceania Oceania

Middle East

Middle East

Africa Africa

0

500

1,000

1,500

2,000

2,500

FY2017 FY2018Projection



KomatsuConventional 315.6 403.2 166.4 241.3 102.7 149.7 294.6 140.8 39.3 95.3 1,949.4

KMC 0.0 134.9 14.0 73.3 5.7 15.0 3.9 41.1 0.2 29.3 317.8

FY2017(A) 315.6 538.2 180.4 314.7 108.5 164.7 298.6 181.9 39.5 124.6 2,267.3Komatsu

Conventional 313.0 362.0 167.0 219.0 100.0 173.0 326.0 134.0 43.0 97.0 1,934.0

KMC 0.0 128.0 24.0 62.0 4.0 17.0 2.0 48.0 0.0 30.0 315.0

FY2018(B)Projection 313.0 490.0 191.0 281.0 104.0 190.0 328.0 182.0 43.0 127.0 2,249.0

Change(B-A) (2.6) (48.2) +10.5 (33.7) (4.5) +25.2 +29.3 +0.0 +3.4 +2.3 (18.3)

2,267.3

2,249.0

PlusMinus

FY2017 YoY Comparison (Conventional）


15%

22%

14% 12%

8%2%

5%



Billions of yen

8%

2%

13%

14%



2,267.3 2,249.0

14%

8%

5%8%

8%

24%

7%

5% 6%

Construction, Mining & Utility Equipment: Projection for Sales (To Outside Customers) for FY2018

FY2018Projection

(18.3)[(0.8)%]

(2.6)[(0.9)%]

(48.2)[(9.0)%]

+10.5[+5.8%]

(33.7)[(10.7)%]

(4.5)[(4.2)%]

+25.2[+15.3%]

+29.3[+9.8%]

+0.0[+0.0%]

+3.4[+8.7%]

+2.3[+1.9%]

※ ※ ※ ※ ※ ※ ※※※

・Overall sales, including those of KMC, to outside customers will decline by 0.8% from FY2017, to JPY2,249.0billion. When KMC’s sales are excluded, sales will amount to JPY1,934.0 billion.

・While sales should increase, centering on Strategic Markets, such as China and Asia, overall sales should remain about flat from FY2017, as adversely affected by foreign exchange rates. When the foreign exchange effects are excluded, sales should increase in all regions except for Japan.

・The ratio of sales in Strategic Markets should increase to 56% of total sales.

※ Region where sales will increase, when foreign exchange effects are excluded.

17

2,280.9 2,270.0

1,500

2,000

2,500

FY17 FY18

275.9

318.0

200

250

300

350

FY17 FY18

14.0%12.1%

SalesFY2017 vs. FY2018(Projection)

Segment profitFY2017 vs. FY2018(Projection)

Billions of yen

Billions of yen

Volume, etc.

+106.6

Selling price+24.4

+42.1 billion yen


Foreign exchange

rate(146.0)

Volume, product

mix, etc. +29.0

Fixed costs(3.7)

Selling price+24.4

Foreign exchange

rate(46.0)

Segment profit ratioProjection

Projection

Construction, Mining & Utility Equipment: Causes of Difference in Projected Sales & Segment Profit

New additions to

consolidation+6.9

New additions to

consolidation+0.5

¥111.2/USD¥129.6/EUR¥16.8/RMB

¥100.0/USD¥123.0/EUR¥15.8/RMB

KMC(2.8)

KMC+37.9

(10.9) billion yen


・While sales should merit from increased volume of sales and price hikes, we project that sales will decline by JPY10.9 billion from FY2017, as adversely affected by foreign exchange rates. Segment profit should advance by JPY42.1 billion, as increased volume of sales and price hikes will more than offset the adverse effects of foreign exchange rates.

・Segment profit ratio should improve by 1.9 points to 14.0%.

Komatsu (conventional) Komatsu (conventional)

Volume, productmix,itc. +27.2Foreign exchangerate (30.0)

Foreign exchange rate (1.8)Temporary expenses +37.3Others +2.4

18

50

%

50

%

Surface Underground

Construction, Mining & Utility Equipment: Projection for KMC’s Business Result & Sales

Annual Sales & Operating Income Ratio

Projection

FY2016Results (A)(Reference)

¥108.6/USD

FY2017Results (B)

¥111.2/USD

FY2018Projection (C)

¥100.0/USD

Changes(B-A) (Reference) Changes(C-B)

increase(decrease) % Change increase

(decrease) % Change

Net sales 266.2 317.8 315.0 +51.6 +19.4% (2.8) (0.9)%Equipment 50.6 61.1 72.6 +10.5 +20.8% +11.5 +18.8%Parts 97.2 113.4 109.3 +16.2 +16.7% (4.1) (3.6)%Service etc. 118.3 143.3 133.0 +25.0 +21.1% (10.3) (7.2)%

Operating income (loss) <excluding Temporary Expenses> 13.4 35.3 36.0 +21.9 +163.4% +0.7 +2.0%

Temporary Expenses (negative figure) (10.2) (47.8) (10.5) (37.6) - +37.3 -

Depreciation after PPA - (40.2) (8.0) (40.2) - +32.2 -Integration expenses etc. (10.2) (7.5) (2.5) +2.7 - +5.0 -

Operating income (loss) <including Temporary Expenses> 3.3 (12.4) 25.5 (15.7) - +37.9 -

Billions of yen

(3.9)%

11.1%

Projection

FY2017 Sales by region (To Outside Customers)

*1: November to October （former Joy Global Inc.ʼs fiscal year）*2: April to March （Komatsu's fiscal year ）

*1 *2

KMC

Billions of yen

Millions of USD

FY2017 Sales by Segment

NorthAmeric

a43%

Europe4%

LatinAmeric

a23%

ＣＩＳ2%

China5%

Asia1%

Oceania

13%

Africa9%

317.8 Billions of yen

1,318 1,379 1,348 1,318 1,198 1,002 1,090 1,290 1,330

1,299 1,571 1,409 1,272 1,158 853 895 1,019 1,093

1,785 2,709

2,254 1,187

815 515 465 548

726

4,404

5,6615,013

3,7783,172

2,371 2,4522,858 3,150

21.5% 21.8%19.4%

15.1%10.3%

3.2% 5.1%11.1%

11.4%

5.1%

11.1% 11.4%

-30.0%

-10.0%

10.0%

0

2,000

4,000

6,000

8,000

FY11 FY12 FY13 FY14 FY15 FY16 FY16 FY17 FY18 FY16 FY17 FY18

Equipment

Parts

Service,etc.

Operating income ratio

50.6

118.3

97.2

266.2 61.1 72.6113.4

143.3

109.3

133.0

317.8 315.0

1.2%

5.1%

8.1%

11.4%

・ For FY2017, sales increased by 19.4% from FY2016, to JPY317.8 billion. Operating loss totaled JPY12.4 billion, including temporary expenses. ・ For FY2018, we project sales will decline by 0.9% from FY2017, to JPY315.0 billion. Operating income should amount to JPY25.5 billion,

reflecting substantially reduced temporary expenses.

※1: Stated figures in “FY2016 results” is created based on Komatsu fiscal year.※2: PPA stands for Purchase Price Allocation. It is an accounting process of valuating and

allocating acquired assets and liabilities to fair prices. ※3: Depreciation after PPA related to inventories, JPY(25.8) billion.

※1

※2 ※3

19

Construction, Mining & Utility Equipment: KMC’s Business Performance(Major Synergy Effects in the First Year of Integration)

• Confirmed more-than-anticipated synergy effects worth about JPY2,5 billion in FY2017, the first year of integration (incl. benefits after FY2017) • Achieved cost reduction by wining new orders for equipment, parts, service and Reman/rebuilt* parts, by engaging in joint purchase and by

integrating funding.

Supply chain

Service, Reman/Rebuild* Back office

• Reduced funding cost by integrating with Komatsu America Corp.

• Reduced insurance and business trip arranging fees.

• Reduced procurement expenses through joint purchase of steel and other materials.

• Improved cash management of KMC’s subsidiary in China in Komatsu’s cash management system.

• Curtailed costs by consolidating back-office operations.

Sales of equipment and parts

• Increased sales of parts by using them in KMC’s products.

• Increased sales of service and rebuild by effectively using the facilities of the two.

Synergy effects confirmed in FY2017 About JPY2.5 billion on a pre-tax income basis

incl. benefits after FY2017

• Won an order for KMC-made rope shovel in Latin America by capitalizing on the relationship of trust with a customer..

* Reman/Rebuild: Remanufacturing and rebuilding of parts and components.

Estimated synergy effects (FY2021 target): About 10% of KMC’s total sales

Peru

KMC

USAAustralia

20

Japan JapanEurope EuropeChina China

Oceania OceaniaOthers Others

North America

North America

0

100

200

300

400

500

600

700

800

90060.3

53.0

12.9 12.0

0

10

20

30

40

50

60

70Sales Segment profit

728.5822.3

FY2018FY2017

Billions of yenRevenues

FY2017 vs. FY2018 (Projection) Assets

Mar 31, 2018 vs. Mar 31, 2019 (Projection) Billions of yen

Mar 31, 2018 Mar 31, 2019

Billions of yen 2018/3E 2019/3EProjection Changes

Interest-bearing debt 546.0 657.5 +111.5

Interest-bearing debt, net 542.6 651.7 +109.0

Net D/E ratio 3.50 4.70 +1.20pts.

FY2017 FY2018Projection Changes

ROA 1.9% 1.6% (0.3)%

Projection Projection

Retail Finance Business: Assets, Revenues and Segment Profit for FY2018

¥106.3/USD¥131.0/EUR¥17.0/RMB

¥111.2/USD¥129.6/EUR¥16.8/RMB

¥100.0/USD¥123.0/EUR¥15.8/RMB

¥100.0/USD¥123.0/EUR¥15.8/RMB

・Assets should increase, mainly due to increased sales of equipment, especially in North America.・Both revenues and segment profit will decline, mainly affected by foreign exchange rates.

21

185.4 208.0

0

100

200

FY2017 FY2018

Sales Segment profitBillions of yen

Billions of yen

（%）:Segment profit ratio

Industrial Machinery & Others: Sales and Segment for FY2018

ProjectionProjection

FY2017FY2018

Projection

Changesincrease

(decrease)Change

%Komatsu Industries Corp., etc.[total of press and sheet-metal machines] 51.4 61.5 +10.0 +19.5%

Komatsu NTC Ltd.[represented by wire saws]

62.9[8.6]

67.9[7.8]

+4.9 [(0.8)]

+7.9%[(9.8)%]

Gigaphoton 37.1 40.5 +3.3 +9.1%

Others 33.7 38.0 +4.2 +12.5%

Total 185.4 208.0 +22.5 ＋12.2%

Billions of yen

Breakdown of sales

14.4 18.0

7.8% 8.7%

-50

-40

-30

-20

-10

0

10

0

5

10

15

20

25

30

FY2017 FY2018

・We project that sales will increase by 12.2% from FY2017, to JPY208.0 billion, and segment profit by JPY3.5 billionto JPY18.0 billion.

22

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

-5%-4% -9%

-19%

-16%

-18%

-11% -8%-7%

-1% +3%

+25% +27%+27% +28%

+17%

-180%

-150%

-120%

-90%

-60%

-30%

0%

30%

60%

90%

120%

0

30,000

60,000

90,000

120,000

150,000

FY13/1QFY13/2QFY13/3QFY13/4QFY14/1QFY14/2QFY14/3QFY14/4QFY15/1QFY15/2QFY15/3QFY15/4QFY16/1QFY16/2QFY16/3QFY16/4QFY17/1QFY17/2QFY17/3QFY17/4Q

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

+13% +15%

-20% -20%

+45%

+5%

-7%

+3%

-9%-14%

+4%

+24%

-60%

-40%

-20%

0%

20%

40%

60%

0

100,000

200,000

300,000

400,000

500,000

600,000

FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18

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

100

80

64

9297

9093

8472

Quarterly demand for 7 major productsAnnual demand for 7 major productsUnits UnitsGrowth rate Growth rate

Note: Estimated by Komatsu

FY17:+24%FY18:+5%〜+10*% （Projection)

：FY07=100Index

4Q: +17%

Projection

76

Construction and Mining Equipment: Actual and Projected Demand for 7 Major ProductsKomatsu (Conventional)

95

・In FY2017, global demand increased by 24%. ・In FY2018, we expect global demand should grow by 5% to 10% from FY2017.

23

0

4,000

8,000

12,000

FY13/1Q2Q 3Q 4Q FY14/1Q2Q 3Q 4Q FY15/1Q2Q 3Q 4Q FY16/1Q2Q 3Q 4Q FY17/1Q2Q 3Q 4Q

Rental companiesRegular customers

-16,000

-12,000

-8,000

-4,000

0

4,000

8,000

12,000

16,000

-100%

-75%

-50%

-25%

0%

25%

50%

75%

100%

FY13/1Q

2Q 3Q 4Q FY14/1Q

2Q 3Q 4Q FY15/1Q

2Q 3Q 4Q FY16/1Q

2Q 3Q 4Q FY17/1Q

2Q 3Q 4Q

Demand (units) Y-o-Y change (%)156

：FY07/4Q=100 4Q: -31%Index

-43%

-23%

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

Construction investmentTrillion of yen

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

[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

FY17：+5%FY18：-5%〜+/-0% ( Projection)

Units

83 101100

Projection

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

69

Exports of used equipmentDemand for new

equipment

Government construction

Private-sector non-residentialPrivate-sector residential

・In FY2017, demand increased by 5% from FY2016. In the second half period of FY2017, demand for new equipment declined mainly due to the reactionary drop from pre-buy demand before new emission controls (effective September 2017) in Japan in the first half period.

・We project demand will decline by 5% to +/-0% in FY2018.

24

0

20,000

40,000

60,000

80,000

FY05FY06FY07FY08FY09FY10FY11FY12FY13FY14FY15FY16FY17FY18 0%

20%

40%

60%

80%

100%

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15

FY16

FY17

Others Construction Road Mining & energy Rental-Regular

Rental-distributor(DORF)

-30,000

-20,000

-10,000

0

10,000

20,000

30,000

-60%

-40%

-20%

0%

20%

40%

60%

FY13/1Q

2Q 3Q 4Q FY14/1Q

2Q 3Q 4Q FY15/1Q

2Q 3Q 4Q FY16/1Q

2Q 3Q 4Q FY17/1Q

2Q 3Q 4Q

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

106 113 102

Index ：FY07/4Q=100

98

+13%

+15%

050100150200250

4Q： +18%

+29%

[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

Housing starts

FY17：+15%FY18：+5%〜+10% ( Projection)

Housing starts in ten thousands

Quarterly demand for 7 major products

Breakdown of demand by segment (Unit basis)

Y-O-Ygrowth rate

Units

Rental

Mining & energy

Others

Y-O-Y growth rate

Projection

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

116

・In FY2017, North American demand should have increased by 15% from FY2016. ・In the United States, demand continued to grow steadily, centering on the infrastructure development and energy-related sectors. Demand also

increased in the rental industry, where demand had been sluggish.・We project demand will increase by 5% to 10% in FY2018 from FY2017.

25

0

10,000

20,000

30,000

40,000

50,000

FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

SouthernEasternOther Western CountriesNorthernThe UK., France, and Germany

5453


68

4Q： +7%

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

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

Y-O-Ygrowth rate

Units

Units

Units

FY17：+8%FY18：+3%〜+8% (Projection)


Projection

05,000

10,00015,00020,00025,00030,00035,000

FY16(Apr.-Feb.)

FY17(Apr.-Feb.)

57

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

73

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000


-10,000

-5,000

0

5,000

10,000

15,000

-40%

-20%

0%

20%

40%

60%

FY13/1Q

2Q 3Q 4Q FY14/1Q

2Q 3Q 4Q FY15/1Q

2Q 3Q 4Q FY16/1Q

2Q 3Q 4Q FY17/1Q

2Q 3Q 4Q

軸ラ

ベル

主要7建機需要（台数）前年同期⽐（％）Demand(unites) Y-o-Y change(%)

・We believe that European demand will have increased by 8% in FY2017 from FY2016.・ Demand remained firm in a major market of Germany as well as in northern Europe. ・In FY2018, demand should remain steady and grow by 3% to 8% from FY2017.

26

0

20,000

40,000

60,000

80,000

100,000

120,000

-20,000

-10,000

0

10,000

20,000

30,000

-100%

-50%

0%

50%

100%

150%

FY13/1Q

2Q 3Q 4Q FY14/1Q

2Q 3Q 4Q FY15/1Q

2Q 3Q 4Q FY16/1Q

2Q 3Q 4Q FY17/1Q

2Q 3Q 4Q

Demand (units) Y-O-Y growth rate

KOMTRAX in China : Average operating hours per month

-14%

3%

29%

1%6% 10%6% 10%12%

-2%

17%9%

-25%

83%

6%14%

7%3%

6%

-2%

2% 0%8%

2%

46%

-49%

-12%

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

0

50

100

150

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

4038


8486

Quarterly demand for 7 major products (Foreign makers)Y-O-Ygrowth rate Units

Monthly demand for hydraulic excavators: Total of 6-ton and larger models)

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

HoursUnits

Units

FY17：+80%FY18：+20%〜+30% (Projection)

＜Chinese New Year＞： Jan. 31, 2014： Feb. 19, 2015： Feb. 8, 2016： Jan. 28, 2017： Feb. 16, 2018： Feb. 5, 2019

(month)

4Q: +45%

Projection

Annual demand for 7 major products (Foreign makers)

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

121

0

5,000

10,000

15,000

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

FY2013

FY2014

FY2015

FY2016

FY2017

・In FY2017, demand expanded by 80% from FY2016. ・Demand for construction equipment continued to grow, supported by good progress of infrastructure development. ・With respect to full-year demand in FY2018, we anticipate it will increase by 20% to 30% from FY2017.

27

-6,000

-3,000

0

3,000

6,000

9,000

-80%

-40%

0%

40%

80%

120%

160%

FY13/1Q

2Q 3Q 4Q FY14/1Q

2Q 3Q 4Q FY15/1Q

2Q 3Q 4Q FY16/1Q

2Q 3Q 4Q FY17/1Q

2Q 3Q 4Q

Indonesia Others Malaysia Thailand Y-o-Y change (%)

0

10,000

20,000

30,000

40,000

FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18

Indonesia

Others

Malaysia

Thailand

117 97

Index : FY07/4Q=100

132

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


UnitsUnits

Y-O-Ygrowth rate

Indonesia: Demand for construction & mining equipment by industrial sectorUnits

FY17：+28%FY18：+8%〜+13% (Projection)

4Q : +26%

Projection

0

1000

2000

3000

4000

5000

6000FY12/1Q2Q 3Q 4Q FY13/1Q2Q 3Q 4Q FY14/1Q2Q 3Q 4Q FY15/1Q2Q 3Q 4Q FY16/1Q2Q 3Q 4Q FY17/1Q2Q 3Q 4Q

ForestryAgricultureConstructionMining

4Q : +46%FY17: +63%

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

148117

：

・In FY2017, Southeast Asian demand advanced by 28% from FY2016.・In Indonesia, the largest market of the region, demand for mining equipment increased sharply.・We believe demand should remain steady in FY2018, increasing by 8% to 13% from FY2017

28

6%

-34%

39% 51%

-5%

-51%

-25%-15%

-3%

60%

-400%

-350%

-300%

-250%

-200%

-150%

-100%

-50%

0%

50%

100%

0

2,000

4,000

6,000

8,000

10,000

FY07

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

Middle East & Africa

Oceania

Asia

Japan&China

Europe&CIS

Latin America

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

FY17：60%FY18：+10%〜+20% (Projection)

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

Note: Demand estimated by Komatsu

Projection

Construction and Mining Equipment: Actual and Projected Demand for Mining Equipment Komatsu (Conventional)

-55%-54%

-49%-45%

-33%-22%

-26%

-15%-2%

-24%

-12%-20%

-33%

-7%

+17%+12%

+96%

+51%+50%

+53%

-250%

-200%

-150%

-100%

-50%

0%

50%

100%

0

500

1,000

1,500

2,000

FY13/1Q2Q 3Q 4Q FY14/1Q2Q 3Q 4Q FY15/1Q2Q 3Q 4Q FY16/1Q2Q 3Q 4Q c 2Q 3Q 4Q

Middle East & Africa

Oceania

Asia

Japan&China

Europe&CIS

Latin America

N. America

Y-o-Y change

4Q: +53%

・In FY2017, we estimate that global demand will have expanded by 60% from FY2016. ・Demand continues to grow in Indonesia, Oceania, Africa and some other regions. ・We project that demand will advance by 10% to 20% in FY2018 from FY2017.

29

19.418.3

23.825.1

31.026.127.628.0

45.745.8

50.7

60.2

58.865.9

65.970.2

33.226.6

34.4

50.447.4

53.473.3

64.8

33.1 35.4

35.839.026.8

28.9

29.628.114.1 12.5

19.814.7

120.9118.7

128.8130.8

115.9110.1

113.7107.5

98.390.7

108.9

135.8

211.1222.3

252.2244.5-7%

-0%+20%

-13%

-4%

-7%

-12%

-18%

-15%-18% -4%

+26%

+115%+145%

+132%

+80%

+40%

+60%+53%

+20%

-600%

-550%

-500%

-450%

-400%

-350%

-300%

-250%

-200%

-150%

-100%

-50%

0%

50%

100%

150%

0

50

100

150

200

250

300

FY14/1Q2Q 3Q 4Q FY15/1Q2Q 3Q 4Q FY16/1Q2Q 3Q 4Q FY17/1Q2Q 3Q 4Q FY16/1Q2Q 3Q 4Q FY17/1Q2Q 3Q 4Q

KMC Middle East & AfricaOceania AsiaJapan & China Europe & CISLatin America N. America

Y-o-Y change(including KMC)Y-o-Y change(Conventional)

96.391.786.6

112.891.7

196.1214.9

202.4260.7

245.2

206.8

140.6144.6

238.9

251.0

143.3133.0

113.4109.3

361.5417.0

554.0614.5

506.3499.3

447.3433.6

930.2 902.9 61.172.6

-14%

+15%+33%

+11%

-18%

-1%

-10%

-3%

+115%

-3%

+41%

-4%

-350%

-300%

-250%

-200%

-150%

-100%

-50%

0%

50%

100%

0

200

400

600

800

1,000

1,200

1,400

FY09FY10FY11FY12FY13FY14FY15FY16FY17FY18

FY14FY15FY16FY17FY18

KMC Middle East & Africa

Oceania Asia

Japan & China Europe & CIS

Latin America N. America

Y-o-Y change(including KMC) Y-o-Y change(Conventional)

587.9612.4

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

Y-o-Y changeBillions of yen

Billions of yenY-o-Y change

137.2145.3

Equipment(KMC)

Parts(Conventional)

Equipment(Conventional)

Service, etc.(Conventional)

Service, etc.

(KMC)Parts(KMC)

Equipment(KMC)

Parts(Conventional)

Equipment(Conventional)

Service, etc.(Conventional)

Service, etc.

(KMC)Parts(KMC)

Projection Projection

166.9

Construction and Mining Equipment: Sales of Mining Equipment

163.0

←conventional←including KMC

・For FY2017, sales expanded by 115% from FY2016, to JPY930.2 billion. When KMC’s sales are excluded, sales advanced by 41% to JPY612.4 billion.

・For FY2018, we anticipate sales of JPY902.9 billion, down 3% from FY2017. When KMC’s sales are excluded, sales should decrease by 4% to JPY587.9 billion.

30Construction, Mining & Utility Equipment : Sales of Parts

Annual sales of parts Quarterly sales of partsBillions of yen

Y-o-Y change (%) Y-o-Y change (%)Billions of yen

Projection

105.0 113.0

118.0 138.5

158.0 171.5

187.4 196.1

214.9

202.4

260.7

245.2 154.5

152.0 120.0 141.5

159.0

148.0

176.3 191.1

182.6 176.5

202.7 195.5

113.4 109.3

259.5 265.0 238.0

280.0 317.0

319.5 363.7

387.2 397.5

378.8

576.8 550.0

+2%

-10%

+18% +13%+1% +14%+6%+3%

-5%

+52%

-5%

+22%

-5%

-250%

-200%

-150%

-100%

-50%

0%

50%

0

100

200

300

400

500

600

700

800


KMC Constrution equipmentMining equipmentYoY(includign KMC) YoY(conventional Komatsu)

45.846.4

50.853.1

54.9

52.756.9

50.445.7

45.8

50.760.258.8

65.8

65.970.2

45.746.4

49.249.8

47.246.144.4

44.942.1

42.0

43.049.3

49.4

50.950.6

51.8

26.828.929.6 28.1

91.6 92.8

100.0 102.9

102.1 98.8

101.3 95.3

87.8 87.8 93.8

109.5

135.0 145.7

146.1 150.0

-3%

+5%

+14%+11%+11%+7%

+1%

-7%-14%-11%

-7%

+15%

+54%

+66%+56%

+37%

+23%

+33%+24%

+11%

-180%

-160%

-140%

-120%

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

0

50

100

150

200

250

FY14/1Q

2Q 3Q 4Q FY15/1Q

2Q 3Q 4Q FY16/1Q

2Q 3Q 4Q FY17/1Q

2Q 3Q 4Q

KMC Construction equipmentMining equipment YoY(including KMC)YoY(conventional Komatsu)

・For FY2017, sales of parts expanded by 52% from FY2016, to JPY576.8 billion. When KMC’s sales are excluded, Komatsu conventional sales increased by 22% to JPY463.4 billion.

・For FY2018, we anticipate sales will decline by 5% to JPY550.0 billion, as adversely affected by foreign exchange rates, while we should be able to capitalize on aftermarket demand.

incl.Komatsu(conventional) and KMC

463.4 440.7

108.2116.7

116.5121.9

31

R&D Expenses Fixed costsInvestment in production and other facilities* and depreciation

52.756.5

70.574.0

Komatsu (Conventional)

Actual and Projected Capital Expenditures, Depreciation, R&D Expenses and Fixed Costs

Billionsof yen

Billionsof yen

Billionsof yen *Excl. investment in rental assets

67.573.6

59.6 58.7 59.3

10.8 10.7 10.34.1 4.4

3.9% 2.9% 3.0%

0

20

40

60

80

100

FY2016 FY2017 FY2018Projection

KMC

Industrial Machinery&others

Construction, Mining6utility Equipment and Retail finance

Depreciation

47.2 47.6 52.5

5.5 4.75.04.1

10.0

49.2

60.1 58.0

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

0

20

40

60

80

100


KMC

Construction, Mining&Utility Equipment and Retail finance

Industrial Machinery&Others

Depreciation

0

100

200

300

400

500


Komatsu(Conventional) KMC

・Capital investment : We plan to promote restructuring of KMC’s production and respond to labor shortage at Japanese plants. ・R&D expenses: We will continue to focus investment in the development of key components, application- and region-specific models

as well as next-generation models based on innovation, such as unmanned models.・Fixed costs: Fixed costs will increase, as affected by the addition of KMC and other companies to consolidated accounting as well as

up-front investment in ICT-driven work reforms.

32

Appendix

33

63.4 62.1 56.2 60.1 49.7 49.3 55.6 53.929.7 34.3 42.8

67.0

13.8%12.9%

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

7.7% 8.4%10.0%

11.6%

9.3% 10.1% 11.7% 12.0%

13.4% 12.9% 12.6%

-50

0

50

100

150

FY14/1Q 2Q 3Q 4Q FY15/1Q 2Q 3Q 4Q FY16/1Q 2Q 3Q 4Q FY17/1Q 2Q 3Q 4Q

Operating profit (KMC) Operating profit (Komatsu conventional)Operating profit ratio (including KMC) Operating profit ratio (Komatsu conventional)

-10.2 -5.2 -6.2 -4.5 -4.8 -3.6 -6.5 -6.1 -2.5 -2.4 -3.3 -5.3 -10.0 -5.8 -4.7 -4.9

411.8 416.7 433.8 467.3 392.3 380.5 417.4 411.6 345.1 353.4 379.0

498.8 441.0 472.4 509.1 540.5

15.2 11.7 12.9 13.6 13.8 13.5

13.4 13.1 11.8 11.6 12.6

12.9 17.5

13.6 14.7 14.3

43.3 59.0 53.565.6

44.7 56.053.6 65.7

34.7 44.2 42.2

69.738.6 40.5

42.363.9

73.9 76.985.3

81.5

-100

0

100

200

300

400

500

600

700

800


KMCIndustrial Machinery & OthersRetail FinanceConstruction, Mining & Utility Equipment(Komatsu conventional)Elimination

¥/USD

¥/EUR

¥/RMB

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 16/4Q109.8 102.9 106.9 114.7124.3 114.6 116.7 121.416.9 15.4 15.7 16.7

460.2

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

482.3 494.0542.0

446.1 446.3 478.0 484.4389.2

<Appendix>Quarterly Sales and Operating Income

Quarterly sales (since FY2014)Billions of yen

Billions of yen

Exchange rates 17/1Q 17/2Q 17/3Q 17/4Q

111.2 110.9 113.0 109.6121.6 129.9 133.2 133.716.3 16.6 17.0 17.2

406.8 430.5

576.2561.2

52.4 60.2

597.7646.8

75.5 83.3

695.3

13.1%

Quarterly operating income(Since FY2014)

34

17% 21% 21% 24% 22% 23% 23% 29% 23% 25% 22% 25% 18% 21% 19% 19%

22% 18% 16% 17% 15% 13% 13% 14% 15% 15% 15% 19%13% 12% 12% 17%

13% 12% 12% 11% 10% 9% 8% 9% 10% 8% 9%10%

12% 12% 16% 13%

48% 49% 51% 48% 53% 55% 55% 48% 52% 52% 53% 45% 57% 55% 53% 51%

0%

20%

40%

60%

80%

100%


Parts, etc Mining equipment Construction equipment(Stragegic Markets) Construction equipment(Traditional Markets)

53.2 55.1 51.0 51.6 42.4 40.7 41.4 44.3 26.3 31.2 38.965.1

92.0

12.9% 13.2% 11.8% 11.0% 10.8% 10.7% 9.9% 10.8% 7.6% 8.8% 10.3% 13.1% 9.3% 10.2% 13.5% 14.8%13.8% 13.3% 14.8%

60% 55% 53% 51% 54% 48% 47% 45% 50% 47% 51% 53% 55% 52% 54% 56%

(50)

0

50

100


Segment profit (KMC) Segment profit (Komatsu conventional)Segment profit ratio (including KMC) Segment profit ratio (Komatsu conventional)

47.9 16.5%

411.8 416.7 433.8 467.3392.3 380.5 417.4 411.6 345.1 353.4 379.0

498.8

441.0 472.4 509.1 540.5

73.9 76.9 85.3 81.5

0100200300400500600


KMC Komatsu conventional515.0 549.3

Quarterly Sales

Quarterly segment profit

Billions of yen

Billions of yen

¥/USD

¥/EUR

¥/RMB

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

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

Exchange rates

<Appendix>Construction, Mining & Utility Equipment: Quarterly Sales and Segment Profit

Breakdown of sales(%)

594.5

55.7 80.1

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

109.8 102.9 106.9 114.7

124.3 114.6 116.7 121.4

16.9 15.4 15.7 16.7

17/1Q 17/2Q 17/3Q 17/4Q

111.2 110.9 113.0 109.6

121.6 129.9 133.2 133.7

16.3 16.6 17.0 17.2

622.0

35

65.3 85.2 92.3 85.2 67.5 80.0 81.2 78.8 59.6 77.7 79.1 84.9 69.1 87.4 78.7 80.4

56.8 68.6 76.6 100.7

75.8 82.9 105.1 106.2

75.6 79.8 80.2

102.6 116.0 131.4 152.1 138.6 39.3

33.732.2

40.4

37.532.7

30.7 38.4

35.829.5 26.2

43.9 43.0

41.6 39.7 56.0

60.164.7

68.570.3

58.4 48.358.2 50.0

49.046.0 51.0

56.8 72.2

77.8 82.0 82.6

14.3 13.6

14.3 11.9

11.5 11.7

13.1 11.2

15.6 14.7 18.2

22.0 27.6

25.6 26.2 29.0

33.4 25.2

22.6 21.6

18.6 13.1

16.4 21.4

18.7 17.3 21.7

39.4 38.3

31.7 43.8 50.8

54.9 48.0

51.3 56.3

52.6 46.5

47.9 42.4

40.2 40.3 50.5

75.5 64.1

68.9 76.9

88.5

34.734.1

31.529.3

25.6 28.1

26.9 26.2

24.0 24.125.8

31.5 45.1

40.0

51.545.2

15.714.8

11.318.8

17.2 14.0

14.6 12.7

9.1 7.16.9

12.57.4

10.1

9.512.5

29.3 25.028.3

29.1

23.7 20.3

17.5 20.8

15.4 14.916.5

24.827.8

31.0

30.934.7

0

100

200

300

400

500

600


*1

404.1 413.5429.4

464.2

388.9 378.0

412.1 408.4

343.4

Billions of yen

Africa

Middle East

Oceania

Asia

China

CIS

Latin America

Europe

North America

Japan

¥/USD

¥/EUR

¥/RMB

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

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

109.8 102.9 106.9 114.7

124.3 114.6 116.7 121.4

16.9 15.4 15.7 16.7

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


111.2 110.9 113.0 109.6

121.6 129.9 133.2 133.7

16.3 16.6 17.0 17.2

351.8376.6

494.4

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

510.9

*1 including KMC

545.8*1

591.7*1

*1618.7

36

15.2

11.7 12.9 13.6 13.8 13.5 13.4 13.1 11.8 11.6

12.6 12.9

17.5

13.6 14.7 14.3

02468

101214161820


4.2 3.3 3.7 3.23.7 3.7 3.2 2.5 1.8 2.3 2.5

-2.3

3.3 2.5 3.0 4.0

28.0% 28.8% 29.2%24.2% 27.3% 28.0% 24.0%

19.3%15.9%

20.1% 20.2%

-17.8%

18.9% 18.9% 20.6%28.0%

-10

-5

0

5

10

15


Segment profit Segment profit ratio

Quarterly sales

Quarterly segment profitBillions of yen

Billions of yen

¥/USD

¥/EUR

¥/RMB

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

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


109.8 102.9 106.9 114.7

124.3 114.6 116.7 121.4

16.9 15.4 15.7 16.7

<Appendix>Retail Finance: Quarterly Sales and Segment Profit

*1*1*1 *1

*1 Including a loss on allowance recorded for bad debt in China (FY16/1Q: JPY-1.0 bn, 2Q: JPY -0.5bn bn, 3Q: JPY-0.2:bn,4Q: JPY-4.9bn)

17/1Q 17/2Q 17/3Q 17/4Q

111.2 110.9 113.0 109.6121.6 129.9 133.2 133.716.3 16.6 17.0 17.2

37

43.3

59.0 53.5 65.6

44.7

56.0 53.6

65.7

34.7 44.2 42.2

69.7

38.6 40.5 42.3

63.9

0

25

50

75

100


3.14.6 3.8 4.5

3.24.2 4.4

7.3

1.7 2.3 2.3

6.0

2.3 2.44.3 5.3

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

11.3%

4.9% 5.3% 5.7%8.6%

6.1% 6.1%

10.2%8.3%

-5

0

5

10

15


Segment profit Segment profit ratio

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

Quarterly sales

Quarterly segment profit

Billions of yen

Exchange rates

Billions of yen

¥/USD

¥/EUR

¥/RMB

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

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

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

109.8 102.9 106.9 114.7

124.3 114.6 116.7 121.4

16.9 15.4 15.7 16.7

17/1Q 17/2Q 17/3Q 17/4Q

111.2 110.9 113.0 109.6

121.6 129.9 133.2 133.7

16.3 16.6 17.0 17.2

38

0%

50%

100%

150%

200%

0%

50%

100%

150%

200%

250%

0%

50%

100%

150%

200%

Orders received/Sales Index

Komatsu America(Mining eqpt)

Komatsu Germany(Mining eqpt)

PC3000, PC4000PC5500, PC7000PC8000

Komatsu Ltd.(Mining eqpt)

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

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

Avg. orders received in value for 6 months/Avg. units shipped in value for 6 months)

<Appendix> Book-to-Bill Ratio for Mining Equipment (6 Months)

39

0%

50%

100%

150%

200%

250%


0%

50%

100%

150%

200%

250%

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

KMC(Surface)

KMC(Underground)

Rope shovelsBlast hole drillsDraglines, etc.

Continuous minersShearersLoad haul dumpsJumbo drills, etc.

<Appendix> Book-to-Bill Ratio of KMC Mining Equipment (6 Months)

40

0%

50%

100%

150%

200%

14/03 14/06 14/09 14/12 15/03 15/06 15/09 15/12 16/03 16/06 16/09 16/12 17/03 17/06 17/09 17/12 18/03

0%

50%

100%

150%

200%

14/03 14/06 14/09 14/12 15/03 15/06 15/09 15/12 16/03 16/06 16/09 16/12 17/03 17/06 17/09 17/12 18/03


Komatsu Industries

Komatsu NTC(Excl. wire saws)

<Appendix> Book-to-Bill Ratio for Industrial Machinery (6 Months)

Avg. orders received in value for 6 months/Avg. units shipped in value for 6 months)

41

<Appendix>Highlights of Results for Fourth Quarter (January – March 2018) of FY2017

Jan.-Mar. 2017 Jan.-Mar.2018

Y-O-Y

KomatsuConventional

KMC increase(decrease)

Change %

Net sales 576.2 695.3 613.7 81.5 +119.0 +20.7%

Segment profit (loss) 68.7 102.1 99.3 2.7 +33.3 +48.5%

Other operating income (expenses) (1.6) (18.7) (18.6) (0.1) (17.0) -

Operating income (loss) 67.0 83.3 80.7 2.6 +16.3 +24.3%

Profit ratio (loss ratio) 11.6% 12.0% 13.1% 3.3% +0.4pts. -

Other income (expenses) (3.8) (6.9) (3.0) -

Income before income taxes 63.2 76.4 +13.2 +21.0%

Net income 45.0 41.3 (3.7) (8.2)%

Billions of yen¥114.7/USD¥121.4/EUR¥16.7/RMB

¥109.6/USD¥133.7/EUR¥17.2/RMB

Depreciation after PPA (3.5)

Integration expenses etc. (3.4)

Total (7.0)


Notes 1) Figures represent those which KMC’s business results are excluded.

2) KMC’s segment and operating income (losse) include temporary expenses in the table on the right.

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

＊2

＊1

＊2

＊3

Billions of yen

・ Consolidated net sales increased by 20.7% from the corresponding period a year ago, to JPY695.3 billion.・ Operating income advanced by 24.3% to JPY83.3 billion. Operating income ratio improved to 12.0%, up 0.4 percentage points.・ Net income decreased by 8.2% to JPY41.3 billion.

42

<Appendix>Segment Sales and Profit for Fourth Quarter (January – March 2018) of FY2017

Jan.-Mar., 2017 Jan.-Mar., 2018

Changes

KomatsuConventional KMC increase

(decrease) % Change

Net sales 576.2 695.3 613.7 81.5 +119.0 +20.7%


[494.4] 498.8 [12.3] 12.9[69.4] 69.7

[618.7] 622.0[12.8] 14.3[63.7] 63.9

[537.1] 540.5 [12.8] 14.3[63.7] 63.9

[81.5] 81.5--

[+124.2]+123.1[+0.4] +1.3[(5.7)] (5.8)

[+25.1%]+24.7%[+3.8%]+10.4%[(8.2)%] (8.4)%

Elimination (5.3) (4.9) (4.9) - +0.3 -

Segment profit 68.7 102.1 99.3 2.7 +33.3 +48.5%


65.1(2.3)

6.0

92.04.05.3

89.24.05.3

2.7--

+26.8+6.3(0.6)

+41.3%-

(11.6)%

Corporate & elimination 0.0 0.7 0.7 - +0.8 -

13.1%

(17.8)%

11.9%

8.6%


3.4%

3.4%

Billions of yen

14.8%

28.0%

14.7%

8.3%

16.5%

28.0%

16.2%

8.3%

・ Construction, Mining & Utility Equipment: Sales increased by 24.7% from the corresponding period a year ago, to JPY622.0 billion. Segment profit increased by 41.3% to JPY92.0 billion. Segment profit ratio was 14.8%, an increase of 1.7 percentage points.

・ Retail Finance: Sales increased by 10.4% to JPY14.3 billion. Segment profit increased to JPY4.0 billion.・ Industrial Machinery & Others: Sales decreased by 8.4% to JPY63.9 billion. Segment profit declined by 11.6% to JPY5.3 billion

43

Japan Japan Japan

North America

North America

North America

Europe Europe

EuropeLatin America Latin America

Latin AmericaCIS CIS

CIS

ChinaChina

ChinaAsia

Asia

Asia

Oceania

Oceania

Oceania

Middle East

Middle East

Middle East

Africa

Africa

Africa

0

50

100

150

200

250

300

350

400

450

500

550

600

Jan.-Mar., 2017 Jan.-Mar., 2018(Conventional)

Jan-Mar., 2018(including KMC)



Jan-Mar.,2017 84.9 102.6 43.9 56.8 22.0 39.4 75.5 31.5 12.5 24.8 494.4Komatsu

Conventional 80.4 102.7 53.1 63.6 26.9 48.0 87.5 34.8 12.4 27.3 537.1increase

(decrease) (4.5) +0.1 +9.2 +6.8 +4.9 +8.5 +11.9 +3.3 (0.1) +2.5 +42.7

KMC 0.0 35.8 2.9 18.9 2.0 2.8 1.0 10.3 0.0 7.3 81.5

Jan.-Mar.,2018 80.4 138.6 56.0 82.6 29.0 50.8 88.5 45.2 12.5 34.7 618.7

537.1

494.4

PlusMinus

Jan.-Mar.,2018

Jan.-Mar.,2017

YoY Comparison (Conventional）


494.4

17%

21%

8%

12%

15%

6%3%5%

19%

15%


Billions of yen

<Appendix> Construction, Mining & Utility Equipment : Sales by Region (To Outside Customers) for Fourth Quarter (January – March 2018) of FY2017

10%

13%

12%




537.1

618.7

9%

13%

16%

14%

7%

9%

22%

(Conventional)

4%

5%2%6%

9%5%

5%8%

2%6%



(4.5)[(5.4)%]

+42.7[+8.6%]

+4.9[+22.6%]

+0.1[+0.1%]

+9.2[+21.0%]

+6.8[+12.0%]

+8.5[+21.6%]

+11.9[+15.9%]

+3.3[+10.5%]

(0.1)[(1.0)%]

+2.5[+10.2%]

・Sales to outside customers by region increased by 25.1% from the corresponding period a year ago, to JPY618.7 billion.

・Sales increased especially in Europe, China and Asia. Sharply affected by an increase in Asian sales, the ratio of Strategic Market increased to 56%.

44

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 https://home.komatsu/en/

・Three domestic sales companies, namely, Komatsu Construction Equipment Sales and Service Japan Ltd., Komatsu Rental Ltd. and Komatsu Forklift Japan Ltd., merged and became Komatsu Customer Support Japan Ltd. on April 1, 2018.

Business Results for FY2017 - home.komatsu · 4/26/2018 · ・Retail Finance: Revenues increased...

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Transcript of Business Results for FY2017 - home.komatsu · 4/26/2018 · ・Retail Finance: Revenues increased...