For Fiscal 2017 (April 1, 2017 – March 31, 2018), consolidated net sales increased by 38.7% from FY2016, to JPY2,501.1 billion, supported by expanded sales of the construction, mining and utility equipment business, especially in North America, China and Asia, as well as the new addition of Joy Global Inc. (currently, Komatsu Mining Corp.) as a consolidated subsidiary in 2017. Operating income expanded by 56.0% to JPY271.5 billion.
In FY2018, the final year of the ongoing three-year, mid-range management plan, “Together We Innovate GEMBA Worldwide: Growth Toward Our 100th Anniversary and Beyond”, we will continue to make diligent efforts in the three strategies of Growth Strategies Based on Innovation, Growth Strategies of Existing Businesses, and Structural Reforms Designed to Reinforce the Business Foundation.
In 2021, we are going to celebrate our 100th anniversary. Komatsu, founded in today’s Komatsu City, Ishikawa Prefecture in 1921, has grown to become a Japan-based global company by committing itself to Quality and Reliability. For us to regard this anniversary as a milestone for sustainable growth into the future, we need to not only learn from the past but also look for management directions from a standpoint which is a lot longer term than ever before.
In emerging countries, we can look forward to growing infrastructure developments, such as roads, railways and water supply and sewerage systems, reflecting expanding population and accelerating urbanization. In developed countries, we can expect urgent needs to maintain the aging infrastructure while labor shortage will be getting more serious. As we are facing climate change, the reduction of environmental impact has become a more critical social issue.
We believe our business of construction and mining equipment is a long-term growth industry. To look for long-term, sustainable growth in this core business of ours, we need a scenario which enables our financial growth, as we respond to not only customers’ needs, but also to social problems and requests at a high level, that is, with products, services and solutions equipped with totally new values.
Of all social issues, safety might come first. In the Komatsu Group, safety comes first. Even before becoming president, I have consistently emphasized the priority of SLQDC (Safety, Law, Quality, Delivery and Cost), when we decide on things. This order of priorities applies to all workplaces, including our production floors, suppliers and distributors.
When talking with many customers, I always feel their solid determination to achieve Zero Accidents in business. Jobsite safety is an essential value of all companies that they should achieve themselves, and for us it is also a shared value with society, which we must first provide to customers through our core business.
By creation of customer value, we mean that we go inside customers’ jobsites, define what their jobsite operations of the future should be, identify real jobsite tasks through constructive communication with customers, and work to solve problems together with customers by making full use of our resources, including products, service and solutions.
By taking full advantage of ICT with our Autonomous Haulage System and SMARTCONSTRUCTION, for example, we can “visualize” jobsite information. Then we can discuss the data together with customers by asking ourselves the “whys” in order to define the ideal conditions that customers are working to achieve in the long range (what they should be like in the future) and to identify real tasks or differences from their ideal conditions of the future. These real tasks become “visible”, including not only safety (Zero Accidents) and improved productivity and efficiency, but also labor shortage, environmental protection, maintenance of biodiversity, sharing of the future with local communities, and improvement of diversity. Together with customers, we will place priority on these tasks and work to solve them.
As we deepen discussions with customers and build on improvements for real tasks, I believe it’s possible for us to spiral up solutions for social problems and customer value.
The cornerstone of our management principles is to maximize our corporate value through commitment to Quality and Reliability. We believe our corporate value is the total sum of trust given to us by society and all our stakeholders. I will ensure all employees share The KOMATSU Way. Further, we will become aware of environmental, social and governance issues more keenly than before, as we work to improve our business performance and move forward in developing corporate strengths while achieving social responsibility in a well-balanced manner.
On behalf of the Board, I would like to extend my sincere appreciation to all our stakeholders for your continuing support.
For FY2017 (April 1, 2017 – March 31, 2018), consolidated net sales totaled JPY2,501.1 billion, up 38.7% from the previous fiscal year, partly reflecting the benefits of including Joy Global Inc. (currently, Komatsu Mining Corp.) as a new consolidated subsidiary. We acquired this leading manufacturer of mining equipment in the United States in April 2017. With respect to profits, operating income expanded by 56.0% to JPY271.5 billion, and the operating income ratio improved by 1.2 percentage points to 10.9%. Net income attributable to Komatsu Ltd. totaled JPY196.4 billion, up 73.2%.
In addition to steadfastly capturing demand in China, Indonesia and many other countries, we also acquired Komatsu Mining Corp. As a result, sales of the construction, mining and utility equipment business expanded by 44.7% from the previous fiscal year, to JPY2,280.9 billion. Segment profit reached JPY275.9 billion, an increase of 70.7% from the previous fiscal year, supported by expanded sales around the world, more than offsetting temporary expenses incurred in relation to the acquisition of Joy Global Inc.
Revenues advanced by 22.8% from the previous fiscal year, to JPY60.3 billion, mainly supported by increased assets in North America. Segment profit climbed by 191.1% to JPY12.9 billion, mainly reflecting no more allowance for doubtful accounts recorded in China.
Sales decreased by 2.9% from the previous fiscal year, to JPY185.4 billion, as affected by reduced sales of presses and wire saws as well as declined sales to Japan’s Defense Agency, while sales of machine tools to the automobile manufacturing industry increased. Segment profit improved by 16.0% to JPY14.4 billion.
|Komatsu Ltd. and Consolidated Subsidiaries||Millions of JPY (except per share amounts)|
|For the fiscal period|
|Cost of sales||1,765,832||1,286,424||1,315,773||1,401,193||1,393,048|
|Operating income ratio||10.9%||9.7%||11.2%||12.2%||12.3%|
|Income before income taxes and equity in earnings of affiliated||291,807||166,469||204,881||236,074||242,056|
|Net income attributable to Komatsu Ltd.||196,410||113,381||137,426||154,009||159,518|
|At fiscal period-end|
|Property, plant and equipment||740,528||679,027||697,742||743,919||667,347|
|Long-term debt-less current maturities||480,698||190,859||212,636||279,270||311,067|
|Komatsu Ltd. shareholders' equity||1,664,540||1,576,674||1,517,414||1,528,966||1,376,391|
|Shareholders’ Equity Ratio||49.4%||59.4%||58.0%||54.6%||51.9%|
|Per share data|
|Net income attributable to Komatsu Ltd.
per share: Basic
|￥ 208.25||￥ 120.26||￥ 145.80||￥ 162.07||￥ 167.36|
|Cash dividend per share*||84||58||58||58||53|
|Komatsu Ltd. shareholders' equity per share||1,764.58||1,672.01||1,609.69||1,622.48||1,443.97|
|* Cash dividend per share provided above are based on dividends paid each fiscal year.|
Sales grew from the previous fiscal year, supported by an increase of demand centering on the rental industry before the enforcement of new emission control regulations.
In the United States and Canada, demand for construction equipment increased from the previous fiscal year, centering on the infrastructure development and energy-related sectors. In Latin America, demand for construction equipment grew, especially in Argentina and Mexico. Affected also by the new addition of Komatsu Mining Corp. to consolidated accounting, sales in the Americas expanded sharply from the previous fiscal year.
In Europe, sales expanded sharply from the previous fiscal year, reflecting steady demand for construction equipment, especially in Germany, a major market of the region, and northern Europe. In CIS, sales also expanded sharply, driven by a continued increase in demand for mining equipment, especially in coal and gold mines.
Sales advanced substantially from the previous fiscal year. This was supported by the continued expansion of demand for construction equipment, resulting from the progress of infrastructure development nationwide.
In Asia, sales expanded sharply from the previous fiscal year, mainly reflecting a steady increase of demand for mining equipment in Indonesia, the largest market of the region, resulting from the growing price of coal. In Oceania, in addition to an increase in demand for mining equipment, sales increased substantially, as also affected by the addition of Komatsu Mining Corp. to consolidated accounting.
In the Middle East, sales increased from the previous fiscal year, mainly reflecting a recovering trend of market demand in some countries, offsetting negative effects of reduced budgets in Gulf nations in response to lowered crude oil prices. In Africa, sales advanced sharply, supported by an increase in demand for mining equipment in South Africa and benefits of newly adding Komatsu Mining Corp. to consolidated accounting.
|Head Office||2-3-6 Akasaka, Minato-ku, Tokyo 107-8414, Japan|
|Date of Establishment||May 13, 1921|
|Common Stock Outstanding||Consolidated: ¥67,870 million based on U.S. GAAP
Non-consolidated: ¥70,120 million
|Number of Employees||Consolidated: 59,632 (Komatsu Ltd. and 227 consolidated subsidiaries)
|Shares of Common Stock Issued and Outstanding||971,967,660 shares (excluding 28,190 thousand shares of treasury stock)|
|Number of Shareholders||149,459|
|Number of Shares per Trading Unit||100|
|Securities Code||6301 (Japan)|
|Transfer Agent for Common Stock/Management Institution for Special Account||Mitsubishi UFJ Trust and Banking Corporation
4-5, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-8212, Japan
|Depositaries (ADRs)||The Bank of New York Mellon
101 Barclay Street, New York, NY 10286, U.S.A.
Tel: +1-(201)-680-6825 for international calls and 888-269-2377 (888-BNY-ADRS) for calls within U.S.A.
Ticker Symbol: KMTUY
|Name||Number of shares held
(Thousands of shares)
|The Master Trust Bank of Japan, Ltd. (Trust Account)||62,612||6.63|
|Japan Trustee Services Bank, Ltd. (Trust Account)||62,405||6.61|
|Taiyo Life Insurance Company||34,000||3.60|
|JP MORGAN CHASE BANK 380055
(Standing proxy: Mizuho Bank, Ltd., Settlement & Clearing Services Division)
|State Street Bank and Trust Company
(Standing proxy: The Hongkong and Shanghai Banking Corporation Limited, Tokyo branch)
|Nippon Life Insurance Company
(Standing proxy: The Master Trust Bank of Japan, Ltd.)
|Japan Trustee Services Bank, Ltd. (Trust Account 5)||18,451||1.95|
|Sumitomo Mitsui Banking Corporation||17,835||1.88|
|Japan Trustee Services Bank, Ltd. (Trust Account 7)||17,183||1.82|
|STATE STREET BANK WEST CLIENT - TREATY 505234
(Standing proxy: Mizuho Bank, Ltd., Settlement & Clearing Services Division)