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Interview with President and CEO12345678910

Q6.Please give us an outline of the new mid-range management plan and specific goals.

Under the plan, we will be focusing our efforts in these areas, and we have set these target figures to achieve by the end of FY2015.

  • (1) We work to attain the industry’s top-level profitability and financial position. (We will lift the target profitability line by strengthening our earning fundamentals.)
  • (2) We will increase the level of profit redistribution to shareholders.
  • (3) We will improve net debt-to-equity ratio and ROE, as we invest in our future growth.

Targets for FY2015

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Simulation of operating income ratio
[Assumed foreign exchange rate: JPY 90 / USD]

Target profitability line (Based on JPY90/USD1)

Target line [translated by a foreign exchange rate of JPY 90 / USD]

When the effects of foreign exchange rates are removed, the sales and operating income ratios are correlated. Our management target is to lift the target profitability line by strengthening our earning fundamentals.

We have steadily improved profitability as seen for FY2001, FY2007 and FY2012. We are working to further lift this profitability line under the new management plan.

As the business conditions, such as currency exchange rates and demand, change dramatically nowadays, it is important to build a strong corporate muscle capable of generating profits under any circumstances. Based on structural reforms we have carried out thus far, we will strive to further improve our profitability by promoting our growth strategies which capitalize on our strengths.

With respect to profits gained from business growth, we will continue to allocate, in a well balanced manner, mainly as redistribution to shareholders, investment in future growth and social contribution. Concerning cash dividends to shareholders, as we maintain our continuous and stable dividend policy by reflecting consolidated business results, we will work to further increase redistribution to shareholders. Specifically, we have set the goal of a consolidated payout ratio (the total of annual cash dividends paid as a percentage of net income attributable to Komatsu Ltd. for the year) as follows.

We have set the goal of a consolidated payout ratio of 30% or higher, as long as the consolidated payout ratio does not surpass 50%. (Previously: we set the consolidated payout ratio of 20% or higher, and would not decrease dividends, as long as the consolidated payout ratio did not surpass 40%.)