Full Year 2019 Komatsu Ltd Earnings Presentation Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Tsubasa Sasaki - Mitsubishi UFJ Morgan Stanley Securities Co., Ltd., Research Division - Analyst : I am Sasaki from Mitsubishi UFJ. I have 3 questions as well. The first question is on Page 17 and 18. The company's forecast for this year's OP included the ForEx impact. What are ForEx sensitivities for major currencies this year? That's the first question. Another question is on Slide 17. What would be the sales growth rate on a local currency basis, excluding the impact of foreign exchange rates?

Question: Tsubasa Sasaki - Mitsubishi UFJ Morgan Stanley Securities Co., Ltd., Research Division - Analyst : My second question is related to an earlier question. This year, fixed cost goes up by JPY 12 billion and R&D expenses go up by JPY 9 billion. On the other hand, under the midterm management plan, the company is investing about JPY 160 billion. What is your expectation in terms of an increase in fixed costs over the next 3 years? I would appreciate your comment on this topic. Unidentified Company Representative Sorry, there is one correction. R&D expenses are JPY 7 billion, not JPY 9 billion. As for the fixed cost trend, first of all, we are making capital investment of around JPY 160 billion, that is true. And you seem to be assuming that fixed costs will gradually increase along with the CapEx. However, we are not diluting fixed costs increasing along with the CapEx because we will rationalize the existing facilities so that we can shift some resources towards new projects under the midterm management plan. There may be some increase in fixed costs, but we're not planning to have a major increase. without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. APRIL 26, 2019 / 7:00AM, 6301.T - Full Year 2019 Komatsu Ltd Earnings Presentation

Question: Tsubasa Sasaki - Mitsubishi UFJ Morgan Stanley Securities Co., Ltd., Research Division - Analyst : Understood. Unidentified Company Representative Let me make some additional comments on JPY 160 billion mentioned earlier. This is not meant to be a net increase in CapEx, rather, we are shifting resources from the existing investments, as Mr. Horikoshi just stated, and we will execute new investments while carefully monitoring the progress.