Komatsu Ltd. · TSE:6301
Komatsu — MINExpo 2016
30 slides from Komatsu's conference presentation, Sep 27, 2016
Slide 1: MINExpo 2016
MINExpo 2016 Rod Schrader, Chairman and CEO Komatsu America Corp Komatsu Confidential 1
Slide 2: Komatsu Business Results 1Q 2016 (April – June)
Komatsu Business Results 1Q 2016 (April – June) % : Profit ratio Sales and Profit [ ]: Sales after elimination of inter-segment transactions 1Q FY2015 1Q FY2016 Vs. 1Q FY2015 • Consolidated net US $M Billions of yen ¥121.3/USD ¥109.8/USD Increase sales declined by ¥133.0/EUR ¥124.3/EUR (decrease) %C
Slide 3: Construction, Mining & Utility Equipment Sales by Region
Construction, Mining & Utility Equipment Sales by Region 1Q 2016 (April – June) • Sales to outside Apr.- Vs. April - June, 2015 customers declined Jun., Billions of yen 2015 by 11.7% from the 388.9 Plus 400 388.9 Minus corresponding period Africa 6% (7.9) (0.2) +4.0 (12.3) Middle 343.4 a year ago, t
Slide 4: Projection for FY2016
Projection for FY2016 No change from our announcement of April 27, 2016 • Consolidated net FY2016 FY2015 Change sales will decrease (Projection) Billions of yen 120.8/USD 105/USD by 9.2% from 132.4/EUR 19.0/RMB 119/EUR 16.2/RMB Increase (decrease) % Change FY2015, to Net sales 1,854.9 1,685.0 (169.9
Slide 5: Construction and Mining Equipment Demand and Outlook
Construction and Mining Equipment Demand and Outlook • In the first 3-Month period Annual demand for 7 major products Quarterly demand for 7 major products of FY2016, global demand declined by 11% from the corresponding period a year ago. Units FY15: -14% Growth rate Units Growth rate FY16: -5%～-10%
Slide 6: Demand for Mining Equipment and Outlook
Demand for Mining Equipment and Outlook Annual demand for Mining equipment Quarterly demand for Mining equipment • In the first 3-Month FY16：-15%～-20% (Initial projection) period of FY2016, Units Y-o-Y change global demand for Units 10,000 Y-o-Y change 3,000 100% Mining equipment +39% +51% dropped 3
Slide 7: Sales of Mining Equipment
Sales of Mining Equipment Annual sales of Mining equipment Quarterly sales of Mining equipment (incl. Parts and service) (incl. Parts and service) • For the first 3-Month period of FY2016, sales declined by Billions 15% from the Billions of yen Y-o-Y change of yen Y-o-Y change corresponding 800 +22%
Slide 8: Sales of Parts
Sales of Parts Annual sales of Parts Quarterly sales of Parts • For the first 3- Month period of Billions of yen Y-o-Y change (%) Billions of yen Y-o-Y change (%) FY2016, sales of 600 140 Parts declined by +18% +18% +19% 20% +13% +14% +11% +11%+12% +14% 20% 14% from the +6% +8% 500 +2% +1% +3% 120 -
Slide 9: Global Production by Commodity and YOY Change
Global Production by Commodity and YOY Change Mt YOY % change Mt YOY % change 40 Coking Coal 40% 120 Thermal Coal 40% 35 20% 20% 100 30 0% 0% 80 25 -20% -20% 20 -40% 60 -40% 15 -60% -60% 40 10 -80% -80% 20 5 -100% -100% 0 -120% 0 -120% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2
Slide 10: Mining Commodity Prices
Mining Commodity Prices Source: AME Group Coking Coal / Iron Ore (US$/ton) Copper (US$/ton) 9,000 290 8,000 240 Coking Coal Iron Ore 190 7,000 140 6,000 90 5,000 40 4,000 2010 2011 2012 2013 2014 Jan May Sep Jan Feb Mar Apr May Jun Jul 1 3 5 10 12 15 17 19 22 23 24 25 26 29 30 31 2010 2011 2012 2013
Slide 11: Mining Equipment Demand Outlook
Mining Equipment Demand Outlook While the industry is currently facing challenges, mining equipment demand is expected to recover in the mid to long term. Commodity Price and Mining Equipment Demand Comm odity Units 10000 15 Price I n d ex CY2 0 0 0 = 1 .0 Demand of Price Forecast Source: 8000 ME I
Slide 12: Komatsu's Mid-Range Management Plan
Komatsu’s Mid-Range Management Plan Komatsu Group employees worldwide will team up with distributors, suppliers and other partners, innovate customers’ GEMBA (workplace) together with them, and provide innovation designed to create new values, thereby working for growth of our core businesses of con
Slide 13: Basic Strategies of our Mid-Range Management Plan
Basic Strategies of our Mid-Range Management Plan In response to our surrounding environment and tasks, we will work to achieve sustainable growth by focusing efforts and through open innovation, when applicable, in 1) Growth strategies based on innovation, 2) Growth strategies of existing businesse
Slide 14: Growth Toward our 100th Anniversary and Beyond
Growth Toward our 100th Anniversary and Beyond Although we assume that demand will remain sluggish for the time being, we will achieve our growth above the industry’s average by promoting growth based on innovation and of existing businesses. Komatsu Confidential 14
Slide 15: Targets of Mid-range Management Plan
Targets of Mid-range Management Plan • In addition to our conventional top-level profitability and financial position in the industry, we will work for growth above the industry’s average, even while demand will remain sluggish. • We will place more importance on redistribution of profits to shareho
Slide 16: Komatsu at MINExpo 2016
Komatsu at MINExpo 2016 Komatsu Confidential 16
Slide 17: Komatsu at MINExpo 2016: D375Ai-8, WA600-8, PC4000
Komatsu at MINExpo 2016 D375Ai-8 WA600-8 • Intelligent machine control • Meets Tier 4 Final regulation with up dramatically increases to 9% less fuel consumption production and operating efficiency with remote control • New Komatsu bucket design and option available. auto digging system increases •
Slide 18: 930E-5 Innovative Autonomous Haulage Vehicle
Komatsu at MINExpo 2016 930E-5 Innovative Autonomous • New ergonomically designed operator cab Haulage Vehicle • Tier 4 Final engine integrated with fuel-saver technology for 3-5% less fuel consumed • Haulage vehicle designed to optimize FrontRunner® Autonomous Haulage System • Innovative cab-less d
Slide 19: MineAlert Collision Awareness and Guided Spotting
Komatsu at MINExpo 2016 MineAlertTM Guided Spotting A major source of Collision Awareness lost productivity is due to inefficient • Dynamically provides operators with • GPS-based proximity truck spotting guidance to optimum during loading detection load location and dumping • Uses predictive path •
Slide 20: Acquisition of Joy Global
Acquisition of Joy Global P&H is one of Joy Global’s brands Komatsu Confidential 20
Slide 21: News Release on September 26, 2016
News Release on September 26, 2016 News Release Komatsu and Joy Global CEOs Talk Commitment Date: September 26, 2016 to Mining Innovation at MINExpo INTERNATIONAL®2016 Tetsuji (Ted) Ohashi, President and CEO of Komatsu Ltd. (TYO: 6301), and Ted Doheny, President and CEO of Joy Global Inc. (NYSE: JOY
Slide 22: Transaction Rationale
Transaction Rationale • While the industry is currently facing challenges, Mining equipment demand is expected to recover in the mid to long term as production and consumption of major commodities increase. • In surface Mining, demand for larger dump trucks is increasing to improve productivity, and
Slide 23: Overview of Joy Global
Overview of Joy Global • Providing a broad range of mining equipment for both surface and underground mining Surface Mining Underground Mining (Soft Rock) Continuous Miner Continuously mine soft rocks Dragline Super-size Loading Machine Sheerer Used with Roof Support; Roof Support Continuously Preve
Slide 24: Post-transaction Vision
Post-transaction Vision • Komatsu considers the mining equipment business to be an area with high growth potential in the mid to long term • Among mining equipment manufacturers, Komatsu and Joy Global share common values and strategies • Together with Joy Global, Komatsu will strengthen our commitm
Slide 25: Synergy Example (1): Full Line Offering of Mining Equipment
Synergy Example (1): Full Line Offering of Mining Equipment • Through acquisition of Joy Global, Komatsu enters the underground Mining equipment business. Komatsu Mining • We will have a broad product Equipment line-up for surface and underground Mining customers, acquiring new products such as supe
Slide 26: Synergy Example (2): Strong Combination of Surface Mining Products
Synergy Example (2): Strong Combination of Surface Mining Products Dump truck / Shovel Process: Excellent Complementation (based on material density of 1.8, 90% fill factor) • In surface Mining, Joy Global Joy Komatsu Global manufactures rope WA900-3E0 WA1200-6 L-1850 L-2350 shovels and wheel Wheel
Slide 27: Synergy Example (3): Innovation at Mining Jobsites
Synergy Example (3): Innovation at Mining Jobsites • Collaboration with Joy Global will accelerate our innovation at Mining jobsites: enhanced capabilities to improve safety and productivity of customer operations and to advance tele-operation and semi / full automation processes Integration and Sha
Slide 28: Post-Acquisition Policy
Post-Acquisition Policy • Optimize management structure to better support our customers. • Joy Global’s highly recognized brands will be maintained. • Cultural similarities such as commitment to safety and customer productivity will facilitate collaboration between Komatsu and Joy Global to accelera
Slide 29: Summary
Summary The acquisition of Joy Global is a key milestone to accelerate our growth toward the 100th anniversary of Komatsu. 1. Komatsu and Joy Global share common values and strategies, and we see great fit as to management, business, technologies, and employees. 2. The combination supported by mutua
Slide 30: Questions
Questions Komatsu Confidential 30