April 28, 2022
Komatsu Ltd. (hereinafter “Komatsu”) (President and CEO: Hiroyuki Ogawa) embarked on the new three-year, mid-term management plan “DANTOTSU Value – Together, to ‘The Next’ for sustainable growth” in April 2022 to ensure sustainable growth in the next 100 years. We will strive to create new value in order to take steady steps forward to the next stage for the workplace of the future and pass on a sustainable future to the next generation.
On the occasion of our 100th anniversary, we have defined our purpose (mission and vision) as “creating value through manufacturing and technology innovation to empower a sustainable future where people, business, and our planet thrive together.” Together with our values, we have also stipulated our brand promise of “Creating value together,” the promise we make to our customers and all other stakeholders, As the basic approach to achieve all these above, we turn to our management principle of “commitment to Quality and Reliability and maximizing the trust given to us by our stakeholders and society.” We position our mid-term management plans as our strategies to achieve our purpose and management principle.
In our flagship business of construction, mining and utility equipment, we expect gradual growth of market demand in the medium to long-range span. In the short-term span, however, we project the volatility will increase as affected by a variety of risks in the external environment. In the industrial machinery and others business, we anticipate that demand for semiconductors will continue to thrive. We also expect to see structural changes in the automobile industry, our client industry against the background of the growing popularity of electric vehicles. As sustainability-impact factors, such as climate change, continue to attract social interest, we developed our Sustainability Policy concerning the achievement of a sustainable society and improvement of our business continuity. Furthermore, we have also made our” 2050 carbon-neutral declaration” as a target of our challenge to satisfy both global warming countermeasures and business growth.
Against this background, we are striving to achieve our vision of developing safe, highly productive, smart and clean workplaces of the future, together with customers, through the growth strategies of the new mid-term management plan. To this end, we are working to create DANTOTSU Value which integrates DANTOTSU Products (advancement of machines), DANTOTSU Service (advancement of machine operations), and DANTOTSU Solutions (advancement of workplace operations). With this creation of customer value that generates a positive cycle for improvement of earnings and ESG resolutions, we will strive for sustainable growth.
(DANTOTSU Value - Customer value creation that generates a positive cycle of improvement of earnings and ESG resolutions)
Materiality and Business Portfolio
Prior to developing the new mid-term management plan, we have extracted priority areas of important social issues (materiality), to both us and stakeholders. As a result, we have recognized the four areas where our materiality and that of stakeholders overlapped as the most important areas, that is, Environment, Customers, Employees, and Ethics & Governance. To generate a positive cycle for improvement of earnings and ESG resolutions, we have reflected efforts for these four areas to our growth strategies.
Concerning our business portfolio, we have also reviewed it when developing the new mid-term management plan. Specifically, we have clarified mid to long-term directions and issues aimed at by each business segment, and reflected them to efforts of focus in the new mid-term management plan. In the construction and mining equipment business, we will focus investments in growth areas and expand the solution and value-chain businesses, as we look into M&A, in order to further improve growth potentials and profitability.
Three Pillars of Growth Strategies and Efforts of Focus
In the new mid-term management plan, we have continued to emphasize the previous plan’s sustainability management in which we work for sustainable growth through a positive cycle for improvement of earnings and ESG resolutions, and have defined three new pillars of growth strategies, consisting of (1) Accelerate growth by means of innovation, (2) Maximize earnings power, and (3) Enhance corporate resilience. By continuing to focus investments to create value in growth areas and maximizing earning opportunities in existing areas, we will work to further improve profitability and build an operational structure that is resilient to demand changes. Additionally, concerning our management foundation that supports these efforts, we will enhance our corporate capabilities to improve operational efficiency and respond to changes in the external environment.
ESG Resolutions through Growth Strategies
Based on our sustainability policy, it is our determination to continue to contribute to society through business activities in the next 100 years. In the new mid-term management plan, we have selected important issues (materiality) for us and ten new goals which are strongly related to the materiality, from our 17 SDGs (Sustainable Development Goals). In order to resolve ESG issues steadily through our growth strategies, we will set KPIs (Key Performance Indicators) for key initiative activities and monitor their achievement. We are planning to disclose our progress in the Komatsu Report.
Management Targets in the Mid-term Management Plan
Concerning management targets in the new mid-term management plan, while we are keeping the same targes from the previous plan, that is, “Growth,” “Profitability,” “Efficiency,” and “Financial Position,” we have set a new ESG target of the challenge to become carbon neutral by 2050. With respect to shareholder return, while placing priority on focusing investments in growth areas, we will continue to work for stable dividends for shareholders and maintain the policy of keeping a consolidated payout ratio of 40% or higher.
No : 0010（3130）
Corporate Communications Department Sustainability Promotion Division Komatsu Ltd.