KOMATSU LTD.

Business Details

This segment offers a broad product lineup ranging from construction equipment such as hydraulic excavators, bulldozers, and dump trucks to surface and underground mining equipment. Customers include construction, civil engineering, and mining operators, and in addition to product sales, the segment develops solutions businesses such as Smart Construction® and AHS (Autonomous Haulage System). Research and development, production, sales, and service are provided globally through a worldwide network of affiliated companies. Net sales for the full year of FY2026 (ending March 2026) were ¥3,806,040 million, accounting for approximately 92% of consolidated net sales.

Recent Overview

Net sales increased slightly due to improved selling prices, but the profit margin deteriorated by 2.9 percentage points year on year due to higher costs and lower sales volumes.

For the full year of FY2026 (ending March 2026), the Construction Equipment & Vehicles segment recorded net sales of ¥3,806,040 million (up 0.2% year on year), only a slight increase. While improved selling prices contributed positively, declining demand in Asia (due to weak coal prices in Indonesia), Japan, and China weighed on results. Segment profit decreased significantly to ¥491,118 million (down 18.0% year on year). A higher cost of sales ratio (deteriorating approximately 1.5 percentage points year on year) and increased R&D expenses (¥111,108 million) pressured profit. By region, the Americas, Europe, and Africa saw increased sales, while Asia, Japan, and China saw decreased sales. In terms of M&A, the acquisition of SRC of Lexington was completed in February and Malwa Forest in April.

Key Products

Growth Drivers

• Solid trend in demand for general construction equipment in the Americas, Europe, and Africa (energy and infrastructure investment, infrastructure investment plans in Germany and the UK)
• Increased mining equipment sales driven by solid copper demand in Latin America (Chile, etc.)
• Expanding adoption of smart solutions such as ICT-equipped construction equipment and AHS (ICT construction equipment penetration rate of 28.7%, cumulative AHS units of 1,016)
• Continued promotion of selling price improvements
• Expansion of the forestry equipment business through the acquisition of Malwa Forest and strengthening of the remanufacturing business through the acquisition of SRC of Lexington
• Evolution of product and service value and expansion of the value chain business based on the new medium-term management plan "Driving value with ambition"

Risks

• Significant decline in mining equipment demand due to continued weak coal prices in Asia (Indonesia) (Asia region net sales decreased 32.9% year on year in the current period)
• Decrease in net sales due to continued weak Chinese real estate market conditions and declining mining equipment demand (China net sales decreased 5.5% year on year in the current period)
• Rising costs including the impact of US tariff policy (explicitly cited as a key risk factor in the FY2027 (ending March 2027) earnings forecast)
• Decreased demand in certain regions (Middle East) due to the impact of Middle East conditions (Middle East net sales decreased 1.7% year on year in the current period)
• Continued sluggish demand from general users and the rental market in Japan (Japan net sales decreased 4.6% year on year in the current period)
• Risk of deteriorating profit margin due to rising costs (increased R&D expenses and fixed costs) and declining sales volume (profit decline also expected in FY2027 (ending March 2027))
• Foreign exchange risk (exchange rate applied in the current period: US$1 = ¥150.5)