President & CEO Imayoshi
My name is Takuya Imayoshi, President and CEO of Komatsu.
Today, as part of Executive Insight, I will begin by explaining our FY2025 financial results and projections for FY2026. Under the heading, Transform our business foundation, which is one of the three growth strategy pillars in our Strategic Growth Plan, Mitsuko Yokomoto, Senior Executive Officer in charge of human resources, will explain our human resources strategy.
[Overview of FY2025 financial results]
First, I will provide an overview of the FY2025 financial results announced on April 28.
Consolidated net sales were ¥4,132.8 billion, operating profit was \567.3 billion, and net income was ¥376.4 billion.
While sales volume decreased, net sales increased, mainly due to improved selling prices, allowing us to post record-high net sales for the fifth consecutive year.
At the same time, profit decreased, despite improved selling prices. This decrease was mainly due to a decline in the Indonesian market caused by lower coal prices, as well as the impact of cost increases from additional U.S. tariffs and other factors.
[Projections for FY2026 business results]
Next, I will discuss our FY2026 business outlook.
Our assumed foreign exchange rates used in these projections are 150 yen to the U.S. dollar, 174 yen to the euro, and 106 yen to the Australian dollar.
We forecast consolidated net sales of ¥4,118.0 billion, operating profit of ¥508.0 billion, and net income of ¥318.0 billion for FY2026.
While we will continue to improve selling prices, we project decreases in net sales and profit due to lower volume caused by the situation in the Middle East, the expanding impact of U.S. tariffs, and production cost increases stemming from higher procurement prices and other factors. We expect that the challenging business environment will continue.
This outlook incorporates the impact of the situation in the Middle East and additional U.S. tariffs based on information available as of the end of April. In particular, it was difficult at the time of the financial results announcement to estimate the annual impact of developments in the Middle East. These forecasts represent our view as of April, assuming that direct and indirect impacts on demand, as well as the impact of higher prices for crude oil-derived materials, will continue.
The business environment is becoming even more opaque and uncertain due to heightened geopolitical risks and conflicts in various regions. Even so, we intend to anticipate and capitalize on changes in demand, while seizing growth opportunities and addressing cost and supply challenges.
For more detailed financial results information, please follow the QR code shown on the screen.
[Human resources strategy]
In a business environment marked not only by intense political and economic change, but also by extremely rapid technological evolution, every employee must take on new challenges and drive change proactively to execute the management strategies of the Strategic Growth Plan and achieve sustainable growth. Strengthening the human resources strategy that supports these efforts is therefore an extremely important management responsibility.
Komatsu views human resources as one of the key management resources for creating new value.
Overseas markets account for approximately 90% of Komatsu sales, and approximately 70% of our roughly 67,000 Group employees work outside of Japan. Bringing out the fullest in the abilities and individuality of people from diverse backgrounds leads to innovation and the sustainable enhancement of corporate value. For this reason, we continue to invest in our people.
At this point, Director Yokomoto, who supervises human resources, education, safety and health care, and sustainability, will discuss our approach in this area. Ms. Yokomoto, please go ahead.
Director Yokomoto
Thank you. My name is Mitsuko Yokomoto.
It will be my pleasure to discuss human capital at Komatsu.
[Human capital]
As President Imayoshi mentioned, people are an irreplaceable asset for Komatsu, and we continue investing in our people.
Under the Strategic Growth Plan, we continue to strengthen human capital management through measures that are closely aligned with management strategy.
[Human resources strategy and the Strategic Growth Plan]
Under a human resources policy of creating an environment in which global and diverse members can work together as a team for the growth of the business, Komatsu aims to enhance corporate value sustainably through a positive cycle of growth for the company and individuals.
Specifically, we aim to maximize the Komatsu employee experience through a uniquely Komatsu employee journey. we facilitate this journey from a company perspective (Secure talents, Right people,
right place, Development of future leaders, and Cost management) and the individual perspective (Joining an attractive workplace, Engaging in challenging and/or meaningful Job, Continuous growth & development, and Fair rewards & meaningful recognition).
To achieve this vision, our human resources and education functions emphasize creating workplaces where all individuals can shine as their authentic selves, wherever they are, and we implement a wide range of measures to this end.
As a foundation supporting these initiatives, we continue to create physically and mentally safe workplaces while promoting diversity and inclusion. We also use regular global engagement surveys to understand employee perspectives, confirm the impact of action plans developed and implemented to address issues, and link the results to next steps.
[The Komatsu Way]
Next, I will explain The Komatsu Way.
The Komatsu Group is a global company where employees of many different nationalities and perspectives come together as one.
The shared values that connect these diverse employees are expressed as practices in The Komatsu Way.
The Komatsu Way codifies the corporate culture built by our predecessors, based on our founding principles. The Komatsu Way provides more specific guidelines for practicing Our values—Ambition, Perseverance, Collaboration, and Authenticity—which are the values that employees embody.
We instill a corporate culture that creates innovation by sharing the values that are the strengths of Komatsu, respecting the unique perspectives of diverse employees, and enabling everyone to excel together.
[Implementation framework]
The Komatsu Way Promotion Committee, chaired by the president, serves as a forum for discussing the direction of our human resources strategy, as well as human resources and HR development measures.
Executive Officers in Japan and overseas participate, as do our Global Officers. To respond to the rapidly changing business environment, participants analyze the external environment surrounding Komatsu from the perspective of human resources and hold repeated discussions on recruiting and developing talent to support business growth.
We also hold regular Global HR Meetings to consider and roll out specific measures. These meetings are attended by the heads of the human resources functions of major overseas subsidiaries. These meetings are for sharing an awareness of issues, discussing measures, and exchanging knowledge gained after rolling out said measures.
[Measures under the human resources strategy]
We divide the various measures under our human resources strategy into initiatives conducted across the organization on a global basis and initiatives pursued effectively and efficiently in line with the characteristics of each region and business.
Today, I will talk about our main initiatives employed globally in collaboration with the HR functions in each region.
The first is improved succession planning.
The planned development of global leaders who can drive businesses, functions, and regions is a key to growth for the Komatsu Group, given our worldwide operations.
In addition to Komatsu Executive Officers, the heads of local subsidiaries in major regions are appointed as Global Officers who take part in consolidated management beyond their home regions. Some of these individuals are also appointed as Executive Officers, which results in a structure in which these individuals play core roles in management.
We designate about 700 key positions worldwide as Global Key Positions (GKPs) and formulate succession plans to systematically develop global leaders, including the management members I just discussed.
We update succession plans annually on a rolling basis. For major positions, we discuss future development plans at succession planning meetings that include the President.
The global management seminar, an internal training program, is held regularly to develop global leaders who practice management rooted in The Komatsu Way.
The second initiative is expanding global mobility.
Over our long history, Komatsu has assigned many Japanese expatriates to positions around the world. Today, we emphasize global mobility—international personnel transfers not only from Japan to overseas locations, but also to achieve borderless placement of the right people in the right positions.
One program, launched in FY2024, is the global mining talent program. This training program is designed to develop the next generation of talent in the mining equipment business.
By providing future leaders in each region with opportunities for on-the-job training across borders, we will advance global mobility in the mining equipment business, develop future leaders, and strengthen the competitiveness of the overall business.
The third initiative is the development of human resources to foster innovation.
To foster innovation, we develop talent who understand and use data and digital technologies. At the same time, we create environments to support these individuals.
Specifically, we define the type of talent we need to develop and provide an integrated education system covering all elements from basic education to selective, practical programs. Through this system, we support the development of digital talent and the growth of leaders who can drive strategic digital implementation initiatives.
One part of the activities of the global project team promoting DX and AI utilization, we conduct company-wide literacy improvement training aimed at creating an environment in which AI is used and practiced.
We continue fostering a culture in which all employees see AI as relevant to their own work and use the technology actively.
[Building a foundation to promote human resources measures]
As a foundation supporting these measures, we create physically and mentally safe workplace environments and to promote diversity and inclusion.
Under the President’s message on safety and health, we ensure workplace environments where employees can work safely and with peace of mind, while promoting initiatives to maintain and improve employee health. We also enhance psychological safety in the workplace and build an environment that contributes to employee value creation and growth.
We conduct diversity and inclusion initiatives under the top message that D&I broadens perspectives, accelerates ambition, and creates innovation.
We have translated this top message, videos and columns that improve D&I literacy, and examples of good practices from around the world, into 13 languages to help engagement with these ideas across the company.
[Key Performance Indicators（KPIs）]
Under our Sustainability Policy, Komatsu aims to create a positive cycle of solving social issues and improving profitability through our business activities. We establish KPIs related to solving social issues.
We also continuously track the progress of human resources and HR development activities as KPIs.
We use scores from our regular global engagement survey as one of our indicators.
Our Strategic Growth Plan includes target KPIs for continuous improvement in eNPS and a global score for innovation, in addition to a global score for sustainable engagement.
Based on analysis results from each country and division, we steadily implement action plans, add to our strengths, and improve issues to enhance engagement further.
Komatsu has always continued to take on challenges for innovation while overcoming many difficulties.
We will continue to prioritize people as the source of value creation and create an environment where each individual can grow and demonstrate their capabilities. Through a positive cycle of employee growth and company growth, we will strengthen our ability to execute the Strategic Growth Plan and link these efforts to the sustainable enhancement of corporate value.
