CEO message

We continue to take on the challenge of value creation based on a new mid-term management plan—the Strategic Growth Plan—aiming to maximize corporate value.

My mission is to raise stakeholder confidence and maximize corporate value: My name is Takuya Imayoshi, and I was appointed Komatsu President and CEO on April 1, 2025. Society is changing in more ways and more rapidly than ever. At the same time, the future has become even more uncertain. Taking over as President at this critical juncture, I believe Komatsu must be a force for change itself, not surrendering to change, but creating new value. We have defined the purpose, value and brand promise of “creating value together” during our 100th anniversary in 2021. Based on this, we will continue to commit ourselves to Quality and Reliability to maximize the total sum of trust given to us by society and all stakeholders.
My own career is heavy on experience in accounting, finance, and business administration, beginning with an accounting role at the Awazu Plant. Over my career, I have served in the U.S. and China for a total of 12 years. Most recently in China, I was responsible as Representative of All China Operations for executing structural reforms in a rapidly changing market environment. During my time at the head office, I had many opportunities to communicate directly with investors and other stakeholders in my role as IR manager. I have also been involved in the formulation of three mid-term management plans. As the director-in-charge over the past fiscal year, I led the way in developing our new mid-term plan from a medium- to long-term perspective, focusing intently on future vision of Komatsu. I am working with particular resolve this year as we put our plan into action. Under the new mid-term management plan—the Strategic Growth Plan—we will continue to steer ahead on the course set under the previous policy, striving for a positive cycle of solving social issues and improving profitability.
It is vitally important that we continue with appropriate information disclosure and dialogue if we are to be a company that inspires greater trust from our stakeholders.
Strengthening our presence in growth markets and solving social issues through technological innovation: The construction and mining equipment market is one of cyclical fluctuations in demand. From a medium- to long-term perspective, the construction and mining equipment business is a growth industry. This growth is driven by population growth, mainly in emerging countries, and infrastructure upgrades in developed countries. Over the short term, however, the market is subject to particularly high levels of uncertainty, given not only economic fluctuations, but also risks such as protectionism and geopolitical instability, as witnessed in recent years.
Our long-term demand forecasts for construction and mining equipment by region reflect our expectations for relatively large growth in India, Africa, Asia, and the Middle East, amid population increases. We also expect North America to experience comparatively large growth in the future. The Komatsu strategy is to strengthen our presence by enhancing the capabilities of our distributors and product development in consideration of regional competitive factors, including customer trends and other manufacturers.
We also see intensifying competition in connection with the automation and remote operation of construction and mining equipment driven by advancements in digital technology. We expect to see the same wave of Software Defined Vehicles (SDVs) arrive in construction equipment as has been the case for automobiles. In this area, competition will become even more intense from the standpoint of product advancements and solutions development. Anticipating these developments, Komatsu released our first SDV, the PC200i-12 ICT hydraulic excavator, in December 2024 for the Japanese market. This excavator features 3D machine guidance as standard and optional 3D machine control. The excavator also comes with a standard selection of Smart Construction applications (construction management solutions) to respond more flexibly to customer ICT construction needs. We released this product for Europe, North America, Australia, and other markets from August 2025.
As a long-term trend, carbon neutrality represents another major consideration during product development. Our commitment to carbon neutrality reflects our fundamental stance in addressing the major social issue that is climate change. As a manufacturer of a full line of construction and mining equipment, Komatsu works in all directions to develop diverse power sources for use in a variety of environments, including electrification, fuel cells, and hydrogen, as well as carbon-neutral fuels for use in existing internal combustion engines. We continue pursuing these initiatives while keeping a close eye on technological trends, environmental regulations in each country, and the varied environmental needs that our customers want met in construction and mining equipment.
In response to these industry trends, Komatsu differentiates by providing solutions and developing products that offer advanced functions tied to such solutions. In this way, we take on the challenge of creating value that only Komatsu can offer.

Group photo (President Imayoshi, center) with Komatsu Europe International N.V. employees and distributors at bauma2025 (Germany)
Some thoughts concerning ambition as a key phrase in the new Strategic Growth Plan: As I mentioned, I was the officer responsible for formulating the Strategic Growth Plan during fiscal 2024. The theme of the new Strategic Growth Plan is "Driving value with ambition", inspired by ambition, one of our corporate values. Rather than creating a new set of values to coincide with the Komatsu 100th anniversary, we summarized and verbalized the existing corporate culture we have developed over the years by listening to feedback from Komatsu Group employees around the world. The reason we chose ambition in English, rather than the frequent translation of challenge, is that we wanted to express the idea that we aspire for greatness, innovating without fear of failure. We chose the key word ambition to communicate our enthusiasm to create customer value by investing in our own change, even in times of uncertainty.
The process of creating the Strategic Growth Plan was also an opportunity to refine the Komatsu vision of becoming a collaborative partner committed to optimizing safe, productive, and clean jobsites. We want to identify closely with our customers and the issues they face, evolving our offerings in terms of products and solutions, and continuing to create value together with our customers. In addition, we revised materiality based on the new perspective of double materiality*. Under this new assumption, we backcasted from our vision and conducted scenario planning considering risks and opportunities, establishing three pillars supporting our growth strategy. These pillars are (1) Create customer value through innovation; (2) Drive growth and profitability; and (3) Transform our business foundation.

* Double materiality: A materiality approach that considers an entity's financial impact, as well as the impact on society and the environment.

To create customer value through innovation, we pursue electrification based on demands for carbon neutrality and solutions that contribute to better safety and productivity at customer jobsites. Generative AI will also become an important factor in various applications. Komatsu is already working on generative AI initiatives, and in 2024, we acquired Octodots Analytics, a Chile-based digital solutions provider. Octodots possesses technology that incorporates AI to analyze and optimize operational processes at mine jobsites in real-time. We connect with the mine fleet management systems developed by the Komatsu Group to improve the efficiency of the operational processes. In terms of external technology search, Komatsu has sought advanced technologies through venture capital investments for the past 30 years. We intend to continue planting seeds for future growth throughout the term of this new Strategic Growth Plan.
To drive growth and profitability, we plan to expand our presence by speeding up product development while assessing individual customer needs and the competitive environment in growing markets. At the same time, we have eliminated the conventional classifications of traditional and strategic markets to be more sensitive to the characteristics and competitive vectors in each region and to respond with greater precision. We also plan to expand our value chain business based on a data-driven business model, leveraging the strengths of Komtrax—already at approximately 810,000 units in operation worldwide—to create new added value.
To transform our business foundation, we intend to focus on talent acquisition and development capable of supporting our business growth. We are raising awareness of our presence through a partnership with the historic F1 team, Atlassian Williams Racing. Other efforts in this area include developing the next generation of leaders globally based on a succession plan. We expect to implement quicker and more effective decision-making on a global basis through the visualization of supply chain data, made possible through upgrades to our Enterprise Resource Planning system.
Meanwhile, we have established financial and non-financial management targets. In terms of financial targets, we remain committed to the qualitative targets of the previous mid-term plan, namely, growth rate above the industry's average and industry top-level operating profit ratio. We also considered quantitative targets, but past experience has taught us that such targets may not be appropriate given the extremely high volatility inherent in our industry. At the same time, we judged that it was appropriate to continue pursuing growth above the industry's average and industry top-level profitability to clearly define our stance against the competition in response to changes in the environment.
We also added a new target for Free Cash Flow. In our communications with investors, we received a significant amount of feedback about shareholder returns and improved cash flow. To meet these expectations, we set a target of a cumulative ¥1 trillion in cash flow over three years (excluding M&A-related expenditures). The previous mid-term plan established a target of five times or less for net debt-to-equity ratio in the retail finance business. Some considered this target somewhat conservative, and in light of the fact that we are growing the business while managing risk, we changed the target to a ratio of six times or less.
In terms of non-financial targets, we identified priority initiatives that contribute to solving social issues, and we established KPIs for 30 items we feel are particularly important from the viewpoint of materiality. We will continue to pursue solutions to social issues through our business activities.
When formulating this Strategic Growth Plan, we held a considerable number of discussions right up until the formal announcement. These discussions included internal global meetings, consultation with the Board of Directors, and feedback from the International Advisory Board. We discussed individual topics, consistency throughout the Strategic Growth Plan as a whole, and the manner in which we should announce the plan. I am pleased to say that the Board has become increasingly involved in our planning, as well.
Nurturing individual employee growth to grow as a group: My first thought when asked about the strengths of Komatsu is that we are a pioneer of innovation. To date, we have unveiled innovations that include Komtrax, an equipment operation management system, Autonomous Haulage System (AHS), and Smart Construction. We are proud to have helped our customers solve jobsite issues through these and other innovations. It is one of our differentiated capabilities to provide a full package of solutions for optimal on-site construction and fleet management (solutions), as well as for advanced equipment (products) that are highly compatible with these solutions. Our approach to create value through products and solutions has been gaining acceptance among our customers. Through continued focus, we will support our customers as partners in on-site transformation.
Another strength is our evolution in monozukuri (manufacturing) built on quality control. Komatsu won the Deming Prize in 1964. Since that time, we have maintained a strong tradition of quality management while pursuing improvement across the supply chain to build a global production system resilient to environmental change. Komatsu has adopted a mother plant structure integrating development and production for consistent quality throughout the world. This structure supports simultaneous development, incorporating production efficiency during the development stage and QDC (quality, delivery, and cost) improvements at overseas plants that produce the same products. As an example, we manufacture 20-ton-class hydraulic excavators at nine plants around the world. For these plants, we have established optimal cross-sourcing for product supply in response to fluctuations in demand and exchange rates. We are also working to establish a system of parts procurement using multiple regional suppliers (multi-sourcing) to improve our ability to respond to external environmental risks and stabilize our supply chain. The ERP upgrades I mentioned earlier will help us continue to provide customers with the best products, services, and solutions through integrated supply chain data and a refined ability to respond to an ever-changing external environment.
Of course, the greatest strength of Komatsu is our people. Approximately 70% of Komatsu's 66,697 Group employees (as of March 31, 2025) work outside of Japan. The source of our value creation is that people from diverse backgrounds share and practice the common values of the Komatsu Way. The Komatsu Way is a set of values, attitudes, and behaviors shared by our employees around the world, codified in 2006. We revisit the Komatsu Way at the timing of each President's transition, making a fourth revision in January 2025. The Komatsu Way is also the foundation for human resources development, making it possible to continue through following generations. We are committed to fostering a corporate culture that encourages employees to take on challenges, creating an environment that nurtures individual growth and encourages active contribution, ultimately leading to the growth of the Komatsu Group as a whole.

Town hall meeting held at the Osaka Plant
A message to our stakeholders: The Komatsu global operations continue to grow, with net sales now exceeding ¥4 trillion. A full 90% of construction, mining and utility equipment sales come from outside of Japan, while approximately 70% of all Komatsu employees work outside of Japan. To raise our game as a global company, we intend to shift away from two-axis matrix management (function, region) to a three-axis model, adding the mining equipment, construction equipment, forestry machinery, and industrial machinery as a business axis. In this way, we will conduct more detailed and focused initiatives, accelerate decision-making, and strive toward greater future growth.
We have been doing our utmost to disclose information and communicate with shareholders and investors, proud that we are meeting expectations. Having said that, we will continue striving for further improvement and greater sophistication moving forward.
Our goal remains industry-leading growth and profitability. I ask for your continued understanding and support for Komatsu as we create value through the spirit of ambition, true to our DNA that drives innovation in the face of all challenges.