Komatsu Ltd Q3 2025 Earnings Presentation Transcript

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

Question: Tsubasa Sasaki - UBS - Analyst : Do you hear me? This is Sasaki from UBS Securities.

Question: Tsubasa Sasaki - UBS - Analyst : I have two questions. The first one is about a review about Q3. I do believe your results were pretty good, and you were able to see good progress against your company plan as well. So compared to your assumptions -- I'm sure there's various factors like volume and FX. So can you talk about what was good, relatively better or worse and summarize overall? Thank you.

Question: Tsubasa Sasaki - UBS - Analyst : That was very clear. Thank you. Just an additional question. I always ask about the volume of product mix. On page 10, the breakdown can you walk me through that as well?

Question: Tsubasa Sasaki - UBS - Analyst : Yes.

Question: Tsubasa Sasaki - UBS - Analyst : Got it. Thank you very much. My second question is about Hishinuma-san's part. The assumptions for construction equipment demand has been revised. Especially, for the US and China, you have revised it upwards. Whilst you revised it downwards for Japan, for each region, what was different compared to your original assumptions? Can you give me a more detailed reason, why you changed your outlook? That was my second question.

Question: Tsubasa Sasaki - UBS - Analyst : Thank you very much. I was able to understand it very well. Thank you.

Question: Kentaro Maekawa - Nomura Securities Co., Ltd. - Analyst : This is Maekawa from Nomura Securities. Thank you very much for your presentation. My first question is in Asia, mainly on Indonesia perhaps. Demand itself started to see the change of the tide and that's the comment you made before and it started to pick up as you stated. But Q3, your net sales perspective started to see those. So what are the contribution the biggest one? And how should we see the demand as we go forward? If the things are changing for the next fiscal year 2025 and there is some potential for recovery or so, how do you see the Asian market? Could you please focus on the Asia market first?

Question: Kentaro Maekawa - Nomura Securities Co., Ltd. - Analyst : Okay. Thank you. Significant changes are not coming, meaning the recovery trend doesn't have significant impact? Is that what you're saying?

Question: Kentaro Maekawa - Nomura Securities Co., Ltd. - Analyst : Okay. Thank you. So next one, how we should look at the next fiscal year '25 and how we should understand North American market? More than we expected, the Q3 performance was much better and you revised the performance and assumption upward. As for next fiscal year 2025, it's kind of difficult to ascertain the situations around you starting 2025 calendar year, but how should we look at the North American market?

Question: Kentaro Maekawa - Nomura Securities Co., Ltd. - Analyst : Okay. Thank you. Second question, pricing. Caterpillar started to see negatives from pricing but FY 2025 there is no significant drop in pricing. That's how I see it. On your part, the selling prices started to contribute positively but progress started to get slower. So improvement of selling prices in January, as you said, but how would you like to take the policies or measures for selling prices including parts? And as far as you can disclose it, could you please make a comment on that? Thank you.

Question: Kentaro Maekawa - Nomura Securities Co., Ltd. - Analyst : Thank you very much. On the pricing, some of the things will remain. Would it be applied to original equipment or spare parts or whether would it be for construction equipment and mining equipment?

Question: Kentaro Maekawa - Nomura Securities Co., Ltd. - Analyst : Thank you.

Question: Yoshinao Ibara - Morgan Stanley - Analyst : Hello. This is Ibara from Morgan Stanley. Can you hear me?

Question: Yoshinao Ibara - Morgan Stanley - Analyst : My first question is about for the construction, mining and utility equipment segment, on a cumulative basis, when you compare Q3 and Q4, sales went down slightly and profits increased. And I think it goes back to the mix answer. Q-on-Q, I think I recall that you had walked us through the details in Q3. So if you can do that again that would be great? And as we head towards the fourth quarter, can you also share with us your view? Earlier you were talking about some push-outs for both construction and mining. So, if that all comes through in Q4 when you do the math the numbers for Q4 look a little low. So can you share your views on this? So can you walk us through the Q-on-Q trends from Q2 going into Q3 and then Q3 going into Q4? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 31, 2025 / NTS, 6301.T - Q3 2025 Komatsu Ltd Earnings Presentation

Question: Yoshinao Ibara - Morgan Stanley - Analyst : Thank you very much. One more question is about where we show the BB ratio that's on page 35. For Komatsu America, it seems -- well it's the book-to-bill ratio. So of course it's in relationship to shipments. Three months ago Horikoshi-san you were saying that if orders aren't that great it will affect shipments for next fiscal year. But overall for CapEx of customers who buy dump trucks goes back to Ogawa-san's remark, but does this happen to be the case where the ratio is not that great? Or are these trends likely to affect next year's shipments?

Question: Yoshinao Ibara - Morgan Stanley - Analyst : So basically because it's a large-sized product the order timing comes in bulks. So I guess there are no major changes in trend?

Question: Yoshinao Ibara - Morgan Stanley - Analyst : Thank you very much.

Question: Graeme McDonald - Citigroup, Inc - Analyst : Can you hear me? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 31, 2025 / NTS, 6301.T - Q3 2025 Komatsu Ltd Earnings Presentation

Question: Graeme McDonald - Citigroup, Inc - Analyst : So I'll ask one question. For Asia, trends in Asia, originally for this fiscal year, JPY484.5 billion was the sales expectation that you projected several months ago. But according to what you said, Indonesia and other regions may exceed expectations. If that's the case, up until now, you will be reaching levels that are unprecedented. It might be record highs. From an economic cycle point of view, I believe that Asia is going to be good for a while. However, you -- the Chinese manufacturers, there are some concerns that they will continue to be a threat. But for sales in Asia for both construction and mining equipment combined, are you concerned that there may be a slowdown? Because I think that risk conditions may last, but what are your view -- what is your view?

Question: Graeme McDonald - Citigroup, Inc - Analyst : So, in other words, non-mining in Indonesia for construction equipment and forestry, if it's weak right now, is it going to improve? And for Malaysia, where there's momentum, it might go up even forward? And I do believe you can expect more from India. So if Chinese competition is not going to change in their behavior, I expect that Southeast Asia is going to continue to be strong and that will lead to higher margins, won't it?

Question: Graeme McDonald - Citigroup, Inc - Analyst : Thank you.

Question: Takeru Adachi - Goldman Sachs - Analyst : Thank you. This is Adachi from Goldman Sachs Securities. Do you hear me speak?

Question: Takeru Adachi - Goldman Sachs - Analyst : Just a final question. In North American market, mining equipment on estimated basis in North American market, the positive growth on a year-on-year basis that's very likely to be. And obviously, yes, that's been contributed by FX but still in North America market versus a major contributor -- a major competitor, it looks good. So maybe there's some variance of clients and some efforts that you're making have been contributing and maybe the service and spare parts are contributing a lot. Could you please give us a breakdown of these details? Thank you.

Question: Takeru Adachi - Goldman Sachs - Analyst : Thank you. Q2 to Q3, it seems like there is an improvement by notch. Why is it? Can you justify it, because of the change of the administration with President Trump or new projects coming in because of that?

Question: Takeru Adachi - Goldman Sachs - Analyst : Yes, from Q2 to Q3.

Question: Takeru Adachi - Goldman Sachs - Analyst : Thank you.