Settlement・Finance|Press Release(2020)|Komatsu Ltd.

Oct. 28, 2020

Komatsu Ltd. (“Company”) (President and CEO: Hiroyuki Ogawa) and its consolidated subsidiaries (together “Komatsu”) have revised the projections for consolidated business results as well as cash dividend for the fiscal year ending March 31, 2021 (April 1, 2020 – March 31, 2021), which Komatsu announced on July 30, 2020.

1.Projection for Consolidated Business Results for the Fiscal Year Ending March 31, 2021 (U.S. GAAP)

Reasons for the Revision

In the first six-month period (April 1 – September 30, 2020) of the fiscal year ending March 31, 2021, demand for construction and mining equipment decline, particularly in North America, Europe & CIS, and Asia as affected by the coronavirus (COVID-19) pandemic. In the second six-month period (October 1, 2020 – March 31, 2021), Komatsu assumes that demand will remain steady in China and will get back on a recovery track in North America, Japan and some other regions. While Komatsu will continue to invest in growth areas, an effort of focus in the mid-term management plan, it can also look forward to benefits of reduced fixed costs by having reassessed the priorities of projects and improved operational efficiency. As a result, we can expect that full year business results for FY2020 will outperform the projections as of July 30, 2020 and we will revise both sales and profits.

Concerning foreign exchange rates, which are preconditions for the projection of full year results, Komatsu has revised the projected exchange rate with the euro (to EUR 1=JPY 124 as the average exchange rate in the second six-month period). Accordingly, Komatsu estimates the average exchange rates for the full year as follows: USD 1=JPY 106.1, EUR 1=JPY 122.7 and RMB 1=JPY 15.1. (Initial assumption: USD 1=JPY 105.6, EUR 1=JPY 116.7 and RMB 1=JPY 15.0)

2.Revision of Projected Cash Dividend

Reasons for the Revision

Komatsu is building a sound financial position and is enhancing its competitiveness in order to increase its sustainable corporate value. Concerning cash dividends, Komatsu has the policy of continuing stable payment of dividends after comprehensively considering consolidated business results and reviewing future investment plans, cash flows and the like. Specifically, Komatsu has the policy of maintaining a consolidated payout ratio of 40% or higher.

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