Full Year 2023 Komatsu Ltd Earnings Presentation Transcript

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

Question: Tomohiko Sano - JPMorgan Chase & Co, Research Division - Analyst : This is Sano from JPMorgan. Do you hear my voice all right?

Question: Tomohiko Sano - JPMorgan Chase & Co, Research Division - Analyst : First, I'd like to ask about the gap between the outlook from the third quarter of fiscal 2022 and the actual outcome. Please first explain about the supply chain situation, how it has changed over the past 3 months compared to your projections? And how you see the procurement involvement this fiscal year? Also, what is your view about cash flow? I think you projected free cash flow to be around JPY 130 billion 3 months ago. And I assume that would be cut by around 70 -- or maybe JPY 60 billion to JPY 70 billion for inventory, but it has fallen further. Would you update us on that situation and give us a projection for this fiscal year, please? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 28, 2023 / NTS, 6301.T - Full Year 2023 Komatsu Ltd Earnings Presentation

Question: Tomohiko Sano - JPMorgan Chase & Co, Research Division - Analyst : Second, how do you see the sales of mining equipment for the fiscal year ending March 2024? First, for orders, you told us when you discussed the BB ratio that there was a spike for Komatsu America, how has that evolved? And what impact would it have? Also, are you starting to see the impact of GHH and if you have any targets or expectations for AHS for this fiscal year? That is all.

Question: Tomohiko Sano - JPMorgan Chase & Co, Research Division - Analyst : Yes. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 28, 2023 / NTS, 6301.T - Full Year 2023 Komatsu Ltd Earnings Presentation

Question: Tomohiko Sano - JPMorgan Chase & Co, Research Division - Analyst : AHS and whether there is an impact of GHH?

Question: Tomohiko Sano - JPMorgan Chase & Co, Research Division - Analyst : Is GHH in Germany, not included in your projections for this fiscal year?

Question: Tsubasa Sasaki - Mitsubishi UFJ Morgan Stanley Securities Co., Ltd., Research Division - Analyst : Can you hear me? I'm Sasaki from Mitsubishi UFJ.

Question: Tsubasa Sasaki - Mitsubishi UFJ Morgan Stanley Securities Co., Ltd., Research Division - Analyst : I will ask my questions one by one. First, let me ask a follow-up question to Mr. Isayama's. You just told us about the sales assumptions for mining equipment and parts. But could you tell us the sales growth rate for construction equipment and the plan for the current fiscal year for equipment and parts, separately? Also, I want to clarify another point. In the previous fiscal year, sales did not grow as expected due to the shortage of semiconductors and containers. In contrast this fiscal year, you will be able to produce products as you plan, so assume you will conduct recovery production, same as the automotive industry. But why do you expect decline in sales of construction equipment? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 28, 2023 / NTS, 6301.T - Full Year 2023 Komatsu Ltd Earnings Presentation Could you elaborate more on the background about the forecast of sales decrease, even though recovery production is expected? I appreciate if you explain it by region and its inventory.

Question: Tsubasa Sasaki - Mitsubishi UFJ Morgan Stanley Securities Co., Ltd., Research Division - Analyst : So am I correct in understanding that sales will increase for North America and Japan, but will decrease for other regions for the equipment?

Question: Tsubasa Sasaki - Mitsubishi UFJ Morgan Stanley Securities Co., Ltd., Research Division - Analyst : I am asking about the equipment.

Question: Tsubasa Sasaki - Mitsubishi UFJ Morgan Stanley Securities Co., Ltd., Research Division - Analyst : Could you tell me specifically in which regions you expect the construction equipment sales to drop?

Question: Tsubasa Sasaki - Mitsubishi UFJ Morgan Stanley Securities Co., Ltd., Research Division - Analyst : I see. My second question is exactly about that point. I understand the situation is good for the U.S., Japan in mining equipment. But could you elaborate more on the background and reasons for the expected decline in sales of construction equipment in regions other than Japan, North America and the Middle East, such as in Latin America, Asia and Oceania, as you have just mentioned? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 28, 2023 / NTS, 6301.T - Full Year 2023 Komatsu Ltd Earnings Presentation

Question: Tsubasa Sasaki - Mitsubishi UFJ Morgan Stanley Securities Co., Ltd., Research Division - Analyst : In summary, mining equipment is doing well. Sales in Japan, North America and the Middle East are strong. But there are risks in other regions as you've just mentioned. So with expectation of their sales decrease, the total volume and the product mix will decline. Is my understanding correct? Unidentified Company Representative It is correct.