Top Message FAQ policy notes

Questions and Answers at the Conference on Results for FY2009 ended March 31, 2010
(Click the questions for the corresponding answers.)

Q1: Could you tell us your projection for next fiscal year ending March 31, 2011 by breaking it down to the first and second half periods?

Q2: For the current fiscal year ending March 31, 2011, you are projecting that sales of the construction, mining and utility equipment business will increase by about 230 billion yen from the previous fiscal year ended last March. Could you give us a breakdown of that?

Q3: If actual foreign exchange rates of the US dollar, Euro and Renminbi for the current fiscal year differ from your assumptions, how much will your projected operating income be affected?

Q4: One of the targets in your new mid-range management plan calls for an operating income ratio of 15% or higher. How are you going to improve your margin?

Q5: Please update us on the market introduction of the PC200-8 Hybrid.

Q6: Could you tell us about your product strategies for emerging economies?

back to top Q1
Could you tell us your projection for next fiscal year ending March 31, 2011 by breaking it down to the first and second half periods?

A1
Yes. Please look at this table.

*Upon adoption of the FASB Accounting Standards Codification (ASC) 810 (formerly SFAS No.160), "Net income" is equivalent to "Net income attributable to Komatsu Ltd."

back to top Q2
For the current fiscal year ending March 31, 2011, you are projecting that sales of the construction, mining and utility equipment business will increase by about 230 billion yen from the previous fiscal year ended last March. Could you give us a breakdown of that?

A2
Sure. We are anticipating about 80 billion yen in sales in China, about 35 billion yen in sales of mining equipment and about 20 billion yen in sales of parts. Of the remaining amount of about 90 billion yen, we are counting about 50 billion yen for the effects of the inventory elimination adjustment which we carried out in the previous fiscal year.

back to top Q3
If actual foreign exchange rates of the US dollar, Euro and Renminbi for the current fiscal year differ from your assumptions, how much will your projected operating income be affected?

A3
If the Japanese yen appreciates by one yen against the US dollar, it will translate into a loss of about 2.8 billion yen for the full year. Similarly, it will mean a loss of about 200 million yen on the Euro. In the case of the Renminbi, if the Japanese yen appreciates by 1% against the Chinese currency, it will translate into a loss of about 1.1 billion yen.

back to top Q4
One of the targets in your new mid-range management plan calls for an operating income ratio of 15% or higher. How are you going to improve your margin?

A4
First, we are going to increase prices for new equipment and spare parts unfailingly and regularly. Second, we are anticipating that sales of parts, which offer relatively high margins, will continue to grow their share in total sales of the construction, mining and utility equipment business. This will be driven by increasing sales of parts for mining equipment which we have accelerated their sales since 2005. Third, as we completed our inventory adjustment in the first half of fiscal 2009 and demand is recovering, the work volume of our plants is growing, and thereby we will not have any costs resulting from lowered capacity utilization in the current fiscal year. And fourth, we are planning to improve margins by lowering local production costs of equipment in China where we have a high percentage of sales in total sales.

back to top Q5
Please update us on the market introduction of the PC200-8 Hybrid.

A5
In April 2009, we began full-scale market introduction in Japan, and sold more than 200 units, including 60 units to Komatsu Rental Ltd., in fiscal 2009. This amount represented about 20% of our total sales of new hydraulic excavators of the same 20-ton class in Japan. In China, we launched full-scale sales in March this year. During the current fiscal year, we are planning to start sales in North America, Asia and other regions of the world.

back to top Q6
Could you tell us about your product strategies for emerging economies?

A6
We will not develop any products designed specifically for emerging economies. We are going to sell our latest models under one brand worldwide. We are going to demonstrate the competitive edge of our products by increasing their added values as we continue to take full advantage of ICT (Information and Communication Technology) applications including the KOMTRAX (Komatsu Machine Tracking System). It is equally important for us not to stop customers' machines we have sold. To this end, we are expanding our service and support capabilities.

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