KOMATSU LTD. (6301) Stock Price

Komatsu operates three main business segments. First, the "Construction Machinery & Vehicles" division manufactures and sells hydraulic excavators, wheel loaders, bulldozers, dump trucks, and similar equipment. This division plays a key role in construction projects both domestically and internationally.

Second, the "Retail Finance" division provides leasing and installment sales for construction and mining machinery. This enables customers to easily secure financing when purchasing equipment. The division operates through subsidiaries including Komatsu Financial Europe and Komatsu Australia Corporate Finance.

Finally, the "Industrial Machinery and Other" division manufactures servo presses, laser processing machines, transfer machines, and related products. It also manufactures defense-related products including ammunition and armored vehicles. This division conducts business in collaboration with subsidiaries such as Komatsu Sanki and Gigaphoton.

Komatsu Ltd. is committed to "creating new value through innovation in manufacturing and technology, and pioneering a future where people, society, and the planet thrive together." The company pursues quality and reliability as fundamental management principles. To execute this foundation, Komatsu has established a medium-term management plan aimed at creating a virtuous cycle of solving social issues and improving profitability through customer value creation.

Under the 2022-2025 medium-term management plan "DANTOTSU Value – Together, to 'The Next' for sustainable growth," the company achieved record-high sales and profits despite declining construction equipment demand, supported by steady mining equipment demand, favorable foreign exchange movements, and improved selling prices. Through DANTOTSU products, services, and solutions, the company created new customer value and achieved targets across growth, profitability, efficiency, financial soundness, ESG ratings, and shareholder returns.

The new 2025-2027 medium-term management plan "Driving value with ambition" emphasizes challenging innovation alongside stakeholders. The company will advance solutions such as Smart Construction and AHS, combining higher-functionality products to optimize customer operations and deliver new value.

The growth strategy rests on three pillars: ①value co-creation through innovation, ②pursuing growth and profitability, and ③transforming management foundations. The company views the transition to a decarbonized society and digital technology advancement as business opportunities while strengthening resilience against geopolitical risks and trade policy uncertainties.

Specifically, value co-creation through innovation includes expanding diverse power sources and advancing automation and remote operation. Pursuing growth and profitability involves strengthening product competitiveness in Asia and Africa and expanding value chain businesses. Transforming management foundations includes accelerating AI adoption and digital transformation, upgrading core systems, and developing solution platforms for dealers.

The medium-term management plan targeting March 2028 aims for growth and profitability exceeding industry standards, with targets of ROE above 10% and cumulative free cash flow of 1 trillion yen over three years. For shareholder returns, the company targets a consolidated dividend payout ratio of 40% or higher and will conduct share buybacks as appropriate. For non-financial metrics, the company will continue CO2 reduction and carbon neutrality targets while establishing KPIs for activities related to key social issues.