Komatsu
Report
2021
2-3-6, Akasaka, Minato-ku, Tokyo
107-8414, Japan
https://www.komatsu.jp/en
Corporate Communications Department
Sustainability Promotion Division
e-mail: JP00MB_info@global.komatsu
Contents
A Century of Creating the Workplaces
of the Future
Resolution of ESG Issues through
Growth Strategies
01 Our Brand Promise
02 Our Identity
04
Brand Promise as Explained by Global
Officers
–Creating value together
100 Years of Komatsu
– History of Resolving Issues in Response to
Social Needs
Overview of Business
Komatsu’s Strengths
– In-House Development and Production of
Components
–Linking every Workplace through IoT
–Global Production System
Business Segments
06
08
10
13
Top Management’s Views on Komatsu’s
Management Issues and Strategies for
the Next Century
14 Message from the President
20 Message from the CFO
Evolution of Business Model for
Creating the Workplaces of the Future
26
34
Special Feature : Komatsu’s Vision for the
Workplace of the Future
–Komatsu Future 203X
– Collaboration with Partners for
Accelerating Creation of Workplaces of the
Future
–Pursuit of 2050 Carbon Neutrality
Mid-Term Management Plan
(FY2019–FY2021)
DANTOTSU Value
FORWARD Together for Sustainable Growth
38
40
44
46
50
52
Komatsu’s CSR Themes and Mid-Term
Management Plan KPIs
Enhancing Quality of Life
–Providing Products Required by Society
Developing People
Growing with Society
–Social Contribution Activities
Message from an Outside Director
Corporate Governance
Corporate Profile
64
Directors and Audit & Supervisory Board
Members
68
11-Year Summary
70 Non-Financial Highlights
71
72 Corporate Information
73 About Komatsu Report
External Evaluations and Index Inclusion
Cautionary Notice regarding Forward-Looking
Statements
This report contains predictions, plans, forecasts, and other
forward-looking statements that have been judged by
management to be rational based on the information avail-
able at the time of publication. Factors that may cause
actual results to differ materially from those predicted by
such forward-looking statements include, but are not limited
to, changes in economic conditions or product demand in
major markets, foreign exchange rate fluctuations, domestic
or overseas regulatory revisions, or changes to accounting
standards or practices.
Reporting Period: April 1, 2020–March 31, 2021
• This report also includes information on activities after the reporting period in order to provide readers with the latest
information.
• “FY2020” refers to the period from April 1, 2020 to March 31, 2021, unless otherwise noted.
Editorial Policy
Komatsu Report 2021 was published for the purpose of providing clear explanations for all stakeholders on
Komatsu’s medium- to long-term business strategies and the virtuous cycle generated as the Company
resolves environmental, social, and governance (ESG) issues through its business. In preparation of this
report, we referenced the International Integrated Reporting Framework released by the International
Integrated Reporting Council and the Guidance for Integrated Corporate Disclosure and Company-Investor
Dialogue for Collaborative Value Creation: ESG Integration, Non-Financial Information Disclosure, and
Intangible Assets into Investment released by the Ministry of Economy, Trade and Industry.
A Century of Creating the Workplaces of the Future
Our Brand Promise
Our Brand Promise
“Creating value together” is the promise Komatsu makes to its customers and all other stakeholders.
Together with you, we can new value and work toward a sustainable future. The emphasis on “together”
indicates the importance we place on partnership.
Our Story
Our roots stretch back more than 100 years to a lush forest near Komatsu City in
Ishikawa Prefecture, Japan that was once home to a copper mine vital to the sur-
rounding community. The mine’s closure in 1920 could have meant the end for
community residents dependent on the jobs, but instead it was a new beginning.
The owner of the mine and our founder, Meitaro Takeuchi, was an entrepreneur
with an extraordinary humanitarian vision, committed to enhancing the commu-
nity’s quality of life, developing future generations and growing with society.
Determined to bring industrial technology to his country, Takeuchi created a new
company by nurturing the skills of the people in the local community.
Meitaro Takeuchi,
Founder
Takeuchi’s vision and strong guiding principles stood the test of time. Through the years, Komatsu’s contin-
ued investment in core capabilities and strategic acquisitions have connected smart, diverse people and
cutting-edge technologies with a shared belief that partnerships are the best way to solve challenges and
meet society’s needs.
As the world grows and evolves, the people who power modern society and develop the world’s infrastructure
count on partners they can trust to empower them and create value.
Web
Komatsu 100 years of “creating value together”
https://www.youtube.com/watch?v=q6nbmp5tFwM&t=0s
Yusenji Coal Mine, Komatsu’s
predecessor
Komatsu Report 2021
1
A Century of Creating the Workplaces of the FutureTop Management’s Views on Komatsu’s Management Issues and Strategies for the Next CenturyEvolution of Business Model for Creating the Workplaces of the FutureResolution of ESG Issues through Growth StrategiesCorporate Profile A Century of Creating the Workplaces of the Future
Our Identity
01
Our Identity
Komatsu has defined its corporate identity by reflecting on its corporate growth built by its forerunners and its relations with society.
Specifically, Komatsu has articulated its mission and vision as its purpose, together with its values. The corporate identity also incorpo-
rates pieces that have been created over the Company’s history: founding principles, The Komatsu Way, Komatsu’s Worldwide Code of
Business Conduct, and strategies including the mid-term management plan. As our business and stakeholders diversify further, we will
strive to deliver this promise through our global operations.
Our Identity
Our Purpose
Creating value through manufacturing and technology innovation
to empower a sustainable future
where people, businesses and our planet thrive together.
Our history has been a century of facing and overcoming challenges, and “manufacturing and technology innova-
tion” has been at the heart of all the things we do at Komatsu. As we enter our new centennial, we will continue to
uphold this spirit as we continue to create value together with our partners.
With this spirit we aspire to help create a future where people lead safe, healthy and peaceful lives in harmony,
enabling us all to thrive together.
Concept of Values
Ambition
Perseverance
Collaboration
Authenticity
With a
“challenging spirit”
and without fear of
failure, we innovate
and always aspire
to do more
Even when the
work is difficult, we
remain committed
to our promises
and reliably carry
them through
to completion
Creating value
comes from
teamwork,
inclusion, respect,
diversity and a
win-win approach
to all relationships
To earn and
maintain trust, we
always act with
sincerity, integrity
and honesty,
and communicate
with transparency
2
Komatsu Report 2021
Komatsu Report 2021
3
Our Identity
Our Strategy and Action
Values
Ambition
Perseverance
Collaboration
Authenticity
With a ‘challenging spirit’
and without fear of failure,
we innovate and always
aspire to do more.
Even when the work is
difficult, we remain
committed to our promises
and reliably carry them
through to completion.
Creating value comes
from teamwork, inclusion,
respect, diversity and a
win-win approach to all
relationships.
To earn and maintain trust,
we always act
with sincerity, integrity
and honesty, and
communicate transparently.
S trategy
Management Principle
Management
Strategy
Corporate Social
Responsibility
Founding Principles
The Komatsu Way
Worldwide Code
of Conduct
Action
Management Principle
Management Principle shows our basic stance regarding business administration.
Management Strategy
Our current mid-term management plan is DANTOTSU Value – Forward Together for Sustainable
Growth (FY19-21), envisioning safe, highly productive, smart and clean workplaces of the future.
Corporate Social Responsibility
We believe that our very business is Corporate Social Responsibility. The work that we do directly
supports the growth and improvement of our communities and society in general.
Founding Principles
“Global Expansion,” “Quality First,” “Technological Innovation,” and “Employee Development.” These
are the founding principles laid out by our founder, Meitaro Takeuchi (1860-1928), and they continue
to be upheld by our organization to this day.
The Komatsu Way
The Komatsu Way was developed to convey our shared values and practices across different cultures,
customs and generations.
Komatsu’s Worldwide Code of Business Conduct
Compliance with the rules of business community is considered a top priority at Komatsu. The rules
are not limited to laws and regulations but also include rules that are generally recognized and
respected in society.
2
Komatsu Report 2021
Komatsu Report 2021
3
A Century of Creating the Workplaces of the FutureTop Management’s Views on Komatsu’s Management Issues and Strategies for the Next CenturyEvolution of Business Model for Creating the Workplaces of the FutureResolution of ESG Issues through Growth StrategiesCorporate Profile A Century of Creating the Workplaces of the Future
Brand Promise as Explained by Global Officers—Creating Value Together
Kiyoshi Mizuhara
Director and Senior Executive Officer
Chief Marketing Officer (CMO)
President, Construction Equipment
Solution Division
Pursuit of a Sustainable Society Together
The founding of Komatsu 100 years ago was unique in that the purpose
was to sustain the local community and to make it a hub of economic
growth. Meitaro Takeuchi, our founder, already knew that talent and technol-
ogy were the keys to producing quality, which he was determined to bring to
the global market.
Since those days, our operations have grown extensively but the found-
ing principles serve us to this day. At the same time, as our relationship with
customers, distributors, suppliers and other stakeholders grew, a deep
appreciation of working in partnership was born. We know that we owe our
insights and expertise to the people who work together with us to enable a
better and sustainable future.
In this anniversary year, we established our identity, articulating our mis-
sion, vision, and values, and integrating the Management Principle, The
Komatsu Way, and other existing strategy and action items. Guided by our
identity, we will work globally to deliver our brand promise of “Creating value
together.”
Thank you for choosing us to be your partner in creating a future where
people, businesses and the planet thrive together. With the belief that we
are stronger, wiser, and better together, we look forward to continuing with
you on this journey of creating value together.
Brand Promise as Explained by Global Officers
Creating value together
Global Officer
Michael Blom
Executive Officer
President & MD,
Komatsu South Africa (Pty) Ltd.
02
Globally Unified Komatsu
The launch of our new Brand Strategy is an exciting and hugely motivating
initiative that unites all Komatsu employees toward a sustainable future. Our
brand promise, “Creating value together,” is a single unifying statement that
embodies who we are as a company and what we strive to achieve, in busi-
ness and the world we live in. With a foundation forged over 100 years behind
us, we now look toward the future and create a truly sustainable tomorrow
—together!
As a global unified Komatsu, our core values, Ambition, Perseverance,
Collaboration and Authenticity, will define and guide us over the next 100
years as we deliver on our promise to bring value to all our stakeholders in the
most sustainable and authentic way.
We are committed to living these values in all that we do—having a
challenging spirit, persevering through tough times, collaborating with all our
stakeholders, and always being authentic and true to ourselves. We are
excited and committed to Creating value together and are extremely proud to
be part of the One Komatsu family!
4
Komatsu Report 2021
A Century of Creating the
Workplaces of the Future
Top Management’s Views on
Komatsu’s Management Issues and
Strategies for the Next Century
Evolution of Business Model for
Creating the Workplaces of the Future
Resolution of ESG Issues through
Growth Strategies
Corporate Profile
Global Officer
Rodney Schrader
Senior Executive Officer
Chairman & CEO,
Komatsu America Corp.
Path for Success in the Next 100 Years
A brand is much more than just a logo on our buildings or our shirts. It’s
really a promise we make to every stakeholder about the experience they
can expect when working with us. It’s the experience on our websites, in
every customer meeting and in how we use our data. Our brand is present
every time someone sees our logo, wears our merchandise, visits our parts
counters, operates our machines or talks to us on the phone.
If you think about it, a brand is created by employees, who live and emu-
late the brand through all their interactions and through the products, ser-
vices and solutions they create and support.
For me, Komatsu’s brand is about collaboration and partnering with our
customers for a high-value, seamless experience with us that creates a
feeling of connection and belonging they can rely on. By clearly establishing
our brand promise, strategy and standards in our centennial year, I believe
we’ve set an even more compelling path for success in the next 100 years.
Brand Promise as Explained by Global Officers
Creating value together
Globally Consistent Brand Strategy
As our operation became more and more global and diversified, it was necessary to define and create
a consistent brand strategy globally. On the occasion of the 100th anniversary, we took the opportu-
nity to clarify our identity in a way that is easy to grasp. Through our new branding strategy, we will be
able to better express our values to our customers as well as to stakeholders.
We will refocus our commitment to our founding principles, “Global Expansion,” “Quality first,”
“Technological Innovation,” and “Human resource development,” with a renewed consistency in our
communication. The Komatsu Way shows us how to understand our customers and become a reli-
able partner that moves forward together with them. As a management strategy, we will continuously
seek to create safe, highly productive, smart and clean workplaces of the future.
With a challenging spirit, a teamwork approach, sincerity and commitment, we promise our
stakeholders to “create value together” to empower a sustainable future for people, businesses and
our planet.
Global Officer
Göksel Güner
Chief Operating Officer, Komatsu
Europe International N.V.
Komatsu Report 2021
5
A Century of Creating the Workplaces of the Future
100 Years of Komatsu—History of Resolving Issues in Response to Social Needs
100 Years of Komatsu
History of Resolving Issues in Response to Social Needs
1921
Founding aspiration:
Engage in meaningful work to benefit
the nation
Komatsu Ltd. was established from Komatsu
Iron Works Ltd. (est. 1917), which manufac-
tured mining machines, developed by Meitaro
Takeuchi, founder of Komatsu Ltd., for use in
the Yusenji copper mine. Based on a firm belief
that developing the machinery industry in rural
areas and promoting its growth, as well as
looking to transcend national boundaries with
high-quality products, Meitaro Takeuchi began
manufacturing at Komatsu Ltd. with an eye to
international markets, even when he founded
Komatsu. The next year, Komatsu absorbed
Komatsu Electric Steel Mills, building the
foundation for integrated production from
steel castings to machining and assembly,
which has resulted in one of Komatsu’s
strengths today.
Meitaro’s Guiding Principles
• Global Expansion
• Quality First
• Technological Innovation
• Employee Development
Meitaro Takeuchi, Founder
Challenge
Development of agricultural
tractor for the first time in
Japan
1931
Produced Japan’s first tractor
In response to a request
from the Ministry of
Agriculture and Forestry,
Komatsu took on the
challenge of developing a
farm tractor in Japan.
While competitors gave
up this challenge at the
prototype stage, Komatsu continued its efforts with
a strong commitment to developing a unique
product that others could not imitate, and finally
completed Japan’s first tractor. Subsequently in
1932, Komatsu released the “G25 tractor”
equipped with its own newly developed engine as
an improved version of the product.
Challenge
Challenge for global quality
1961
Project “A” to meet the industry giant’s
market entry
In the 1960s during the
internationalization of
Japan’s economy, the
world’s largest construc-
tion equipment manufac-
turer decided to enter the
Japanese market. In order
to compete against this strong rival, Komatsu under-
took the Project “A” quality improvement project with
a Company-wide commitment to improving every-
thing, including a single screw, and developed a
high-quality vehicle for mass production within about
only two years. In the process, Komatsu introduced a
quality control (QC) method ahead of competitors.
The idea of incorporating QC in the manufacturing
process has been passed down through the genera-
tions to the company of today.
Value
• Increased the level of our
technologies
Built the foundation for devel-
oping and producing con-
struction equipment in Japan
Value
• Achieved global quality on par
with a U.S. manufacturer,
contributing to customers’
improvement of their work-
place productivity
History of Consolidated Global Management
Net Sales and Demand for 7 Major Products
(Demand, Units)
600,000
■ Japan ■ North America ■ Europe ■ Other ■ China ■ Consolidated net sales (right scale)
(Net sales, Billions of yen)
1999
Komatsu Cummins Chile and
Komatsu Middle East
1997
Komatsu Southern Africa
1989
Komatsu Europe International
1995
Bangkok Komatsu
1971
Komatsu Singapore
1970
Komatsu America
1967
Komatsu Europe
1988
Komatsu Dresser
1982
Komatsu Indonesia
1985
Komatsu UK
1978
Komatsu Australia
1977
Komatsu Brasil
450,000
300,000
150,000
0
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
Competition with Foreign Companies
Expansion of Exports
Expansion of Overseas Production
Selective Focus and Global Consolidated Management
(DANTOTSU Product → DANTOTSU Service → DANTOTSU Solution)
6
Komatsu Report 2021
Diversification A Century of Creating the
Workplaces of the Future
Top Management’s Views on
Komatsu’s Management Issues and
Strategies for the Next Century
Evolution of Business Model for
Creating the Workplaces of the Future
Resolution of ESG Issues through
Growth Strategies
Corporate Profile
Challenge
Improvement of overseas sales and
service operations. Establishment of
overseas production operation
Challenge
Improvement of produc-
tivity and safety of mining
Challenge
Solutions for worksite
problems, such as labor
shortages and safety
1967 N.V. Komatsu Europe S.A:
Komatsu’s first overseas subsidiary
1975 First offshore production in Brazil
Pursuing higher levels of quality and reliability in its products,
Komatsu steadily grew exports centered on large-scale bull-
dozers. N.V. Komatsu Europe S.A., Komatsu’s first overseas
subsidiary in Belgium, was established in 1967 for the purpose
of enhancing overseas after-sales services. The years that
followed saw the reinforcement of our export foundation
through the establishment of numerous overseas subsidiaries,
including Komatsu America Corp., Komatsu Singapore Pte. Ltd.,
and Komatsu do Brasil Ltda. We began producing our first
made-overseas bulldozers in Brazil in 1975. We proceeded to
augment our overseas production network, setting up produc-
tion bases in Indonesia in 1982, in the United States and the
United Kingdom in 1985, and in Thailand, China, and India in the
1990s. These bases furnished a global production platform for
hydraulic excavators, dump trucks, wheel loaders, and other
major products.
2008
Succeeded in the world’s first com-
mercial deployment of the
Autonomous Haulage System (AHS)
Komatsu led the world
by deploying the AHS
at a copper mine in
Chile. By equipping
dump trucks with a
high-precision GPS,
an obstacle detection
sensor, and a variety of controllers for the
central management of their operation in the
main control room, Komatsu achieved
24-hour unmanned operation of the dump
trucks. The AHS contributes to substantially
increasing on-site productivity and safety
and solving the issue of labor shortages.
2015
“Smart Construction”:
Creating a workplace of the future
“Smart Construction” is a
solution service that
create safe, highly pro-
ductive, smart and clean
construction sites of the
future by connecting all
kinds of data available at
construction sites through the use of ICT. By
fusing the 3D terrain data obtained by using
drones with ICT construction equipment,
Komatsu has increased the efficiency of the
process, from surveying to inspection, and
has also “visualized” the process, thereby
contributing to the solution of problems at
construction sites.
Value
• Built overseas distributor networks and
achieved the provision of global quality
• Expanded local contributions through
human resource development and
employment around the world
Value
• Improved safety,
reduced costs, and
alleviated operators’
burden at customers’
mining sites
Value
• Achieved optimization of
construction while striv-
ing for “safe, highly pro-
ductive, clean and smart
workplaces of the future”
History of Consolidated Global Management
Net Sales and Demand for 7 Major Products
(Demand, Units)
2017
Komatsu Mining
(Net sales, Billions of yen)
3,000
2006
Komatsu India and
Komatsu CIS
2001
Komatsu (China)
2,250
1,500
750
Web
eBook offering more information on the
100 years of Komatsu
https://www.komatsu.jp/en/com-
pany/history/ebook/HTML5/
pc.html#/page/1
Web
Re-opening of Komatsu no Mori
museum for nurturing children together
with the community
https://www.youtube.com/
watch?v=vWnddb9Ux3E
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017 2018 2019
0
(Year)
Expansion of Overseas Production
Selective Focus and Global Consolidated Management
(DANTOTSU Product → DANTOTSU Service → DANTOTSU Solution)
Komatsu Report 2021
7
Diversification A Century of Creating the Workplaces of the Future
Overview of Business
In the pursuit of sustainable growth, companies are expected to build robust yet flexible earnings structures that respond
to changes in the operating environment while addressing the increasingly more important ESG issues. With the strength
of the manufacturing platform it has forged over the years, Komatsu will respond to social needs by linking customers,
distributors, partners, and communities and all Komatsu workplaces through its DANTOTSU excellence.
Production / Logistics
Komatsu production bases: 81*
Parts distribution bases: 42*
* As of April 1, 2021
Capital investment: ¥86.1 billion
Intellectual Properties
Development bases: Nine mother
plants and Asia Development Center
R&D expenses: ¥73.8 billion
(3.4% of net sales)
Utilization of information: Equipment
with Komtrax: Approx. 650,000 units
Human Resources
Number of consolidated employees:
61,564
Partners
Machine population over past 10
years: Approx. 570,000 units*
* Estimate of construction equipment operational at
customer workplaces based on aggregate 10-year
sales volumes
Sales and service distributors: 205
distributors in 144 countries
(construction, mining and utility
equipment business)
Suppliers: Approx. 2,700
Shareholders: 184,661
Environment
Energy use: 7.8 PJ
Including renewable energy use: 0.7 PJ
Note: 1 PJ (petajoule) = 1015 J (joules)
Water use: 3.2 million m3
Steel (iron) use: 999,000 tons
Finance
Consolidated net sales: ¥2,189.5
billion
Operating income: ¥167.3 billion
Free cash flow: ¥191.0 billion
Total assets: ¥3,784.8 billion
Note: Amounts are either for FY2020 or as of March 31,
2021, unless otherwise noted.
8
Komatsu Report 2021
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• In-house development and produc-
• Collaboration with suppliers (Midori-
tion of key components
kai) enabling the following:
underpinning product performance
(engines, hydraulic components, power
trains, etc.)
P.10
• Accelerated technological innovation
achieved by merging core Komatsu
technologies with external insight
(Open innovation)
P.26
• Digital transformation
P.32
• Product development systems tailored
to global market needs
1. “Monozukuri” (improvement of
product quality, reliability, and
competitiveness)
2. Stable supply of high-quality
materials
• Linking plants (visualization) utilizing
ICT
P.11
• Cross-sourcing: Flexible global pro-
duction and procurement systems that
are resilient to demand and foreign
exchange fluctuations
P.12
• Mother plants structure enabling
improvement of QCD (Quality, Cost,
Delivery)
• Skill transfer and TQM (Total Quality
Management)
Climate change impacts—Total CO₂ emissions: 22.1 million tons
I
Enhancing Quality of Life
—Providing Products Required by Society—
Developing People
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Growing with Society
Responsible Corporate Behavior
Komatsu Report 2021
9
Research and DevelopmentProcurement and ProductionMajor Inputs
Operations at Customer Workplaces
Product Cycles
Products
Services
Solutions
• DANTOTSU
• Enhancement of maintenance
Construction equipment
• Global supply of
Product: Unrivaled
products in terms
of environment,
safety, ICT capaci-
ties, and
productivity
• Full lineup of
construction and
mining equipment
contract services
• Improvement of QCD (Quality,
Cost, Delivery) achieved
through close alignment of
sales forecasts and produc-
tion of spare parts
• Smart Construction
P.11
P.32
Mining equipment
• Autonomous
Haulage System
Construction equipment
• Utilization of information
acquired through Komtrax
P.8
• Product creation
P.11
focused on quality
and reliability
Mining equipment
• Utilization of information
acquired through Komtrax Plus
• Detailed support from directly
owned distributors
• Cultivation of distributor personnel • Brand management
• Global distributor network
high-quality used
equipment, etc.
• Remanufacturing
and rebuilding*
P.33
* Systems for selling used
engines, transmissions,
and other components
that have been repaired to
be of the same quality as
new products
Climate change impacts—Total CO₂ emissions: 22.1 million tons
CO₂ emissions from product use: 19.0 million tons (86% of total)
P.44
The Komatsu Way
P.44
Targets
for FY2021
Accomplishment
of targets of
Mid-Term
Management
Plan
“DANTOTSU Value—
FORWARD Together for
Sustainable Growth”
Pursuit of
Ongoing Growth
Over the Next
100 Years
8
Komatsu Report 2021
Komatsu Report 2021
9
A Century of Creating the Workplaces of the FutureTop Management’s Views on Komatsu’s Management Issues and Strategies for the Next CenturyEvolution of Business Model for Creating the Workplaces of the FutureResolution of ESG Issues through Growth StrategiesCorporate Profile
A Century of Creating the Workplaces of the Future
Komatsu’s Strengths
Komatsu’s Strengths
01
In-House Development and
Production of Components
Komatsu develops and produces major components in-house. Through this approach, the
Company is able to generate technological innovation while improving the durability and
reliability of components. We are convinced that a dedicated focus on components will
enable us to further heighten the functionality and quality of these components and ulti-
mately reach new pinnacles of customer satisfaction. This conviction will continue to guide
the evolution of Komatsu components.
Benefits of Komatsu’s Approach Toward In-House Development and Production of Components
1. Ongoing technological innovation
2. Stable, global supply of components with standardized quality that is not affected by demand
fluctuations
3. Ability to develop component restoration businesses (please see page 33).
4. Predictive maintenance capacities achieved by attaching sensors to components
Major Components
Engine
Powertrain
Hydraulic Equipment
Electronic Device
Power Electronics
• Transmission
• Torque converter
• Axle
• Swing motor
• Final drive
• Pump
• Motor
• Valve
• Cylinder
• Controller
• Monitors
• Sensor
• Power generator motor
• Capacitor
• Inverter
Sources of Components Used in Mid-Sized Hydraulic Excavator
Cylinder
Monitor
Controller
Sensor/Antenna
Cab
Arm, Boom, Bucket
Main valve
Main pump
Engine
Radiator
Exterior
A: Components supplied from Japan
B: Components purchased in centralized manner from global market
C: Components procured locally
Swing circle
Track shoe/roller
Revolving frame
Track frame
Final drive
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Linking every Workplace
through IoT
A deep understanding of workplaces can cast light on various issues, and these issues
must be addressed through innovation. Komatsu has continued to pursue such innovation
by linking workplaces through IoT.
Komatsu’s Strengths
02
World of Linkage through IoT
1. Komtrax
Tracking of Construction
Equipment Information
Komatsu began its quest to track construction equipment information with IT in the late 1990s. This
quest led to the development of the Komtrax construction equipment operation management system
in 1998. This system collects GPS positioning information and operation information to be confirmed
remotely. As of June 30, 2021, Komtrax was installed on 650,000 pieces of equipment around the
world. Komtrax supplies information that helps customers improve productivity, such as that pertaining
to position, operating time, equipment abnormalities, and fuel consumption, and can be used to
manage equipment from locations removed from workplaces. Moreover, installing Komtrax makes it
possible for Komatsu to continue providing customers with support throughout the entire lifespan of
their equipment through means such as proposing the ideal timing for part replacements and mainte-
nance and facilitating trade-ins of used equipment. In 2021, Komtrax was updated for the first time in
20 years to improve its functionality with new features such as the ability to use data from Komtrax in
other applications.
2. Smart Construction
Tracking of Process
Information
Komatsu launched Smart Construction in 2015 as an initiative for tracking process information. This
solution uses drones to perform 3D measurement and digitization of workplaces and ICT-intensive
equipment to optimize work processes through a digital twin methodology in which a digital work-
place is synchronized with its physical counterpart. As of June 30, 2021, Smart Construction had
been used to track information at more than 14,000 workplaces in Japan. In April 2020, we began
offering four new IoT devices and eight applications for accelerating digital transformation using
Smart Construction. Going forward, we look to expand usage of Smart Construction in highly
IT-literate markets, such as those of Europe and the United States.
3. Kom-mics
Linking of Production
Sites with IoT
Operation Tracking
AI Abnormality
Detection
Equipment
Maintenance
Operating
Data
Tool
Information
Process
Outcome
Data
3D Data Utilization
Machine Processing
Welding
Work, Jigs, Tools
Komatsu is applying its IoT workplace linkage approach to its own production sites through Kom-
mics, a system developed to track production equipment and processing statuses so that this infor-
mation can be used to drive improvements. In FY2019, Kom-mics won the Prime Minister’s Prize in
the manufacturing and production process categories of the Eighth Monodzukuri Nippon Grand
Awards. This system has also been introduced at the facilities of partners, allowing the solutions
groups of Komatsu factory production technology divisions to offer support for improving productiv-
ity. Moreover, we commenced external sales of this system in April 2021 with the aim of contributing
to the development of Japan’s manufacturing industry with a particular focus on promoting the
digital transformation of the production sites of small to medium-sized companies.
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A Century of Creating the Workplaces of the FutureTop Management’s Views on Komatsu’s Management Issues and Strategies for the Next CenturyEvolution of Business Model for Creating the Workplaces of the FutureResolution of ESG Issues through Growth StrategiesCorporate Profile A Century of Creating the Workplaces of the Future
Komatsu’s Strengths
Komatsu’s Strengths
Global Production System
Komatsu began exporting construction equipment in the 1950s, ahead of other Japanese companies. We
then began full-fledged overseas production in the 1970s with the aim of mitigating foreign exchange and
customs risks. Today, Komatsu boasts a construction equipment production network comprising 12
bases in Japan and 69 bases overseas.
03
Acting in accordance with our basic policy of conducting production close to demand, we produce
more than 70% of 20- and 30-ton hydraulic excavators, mainstays in our construction equipment lineup,
overseas. Through local production, we aim to achieve four goals: (1) gain trust from customers, (2)
reflect local needs in products, (3) quickly address quality issues, and (4) shorten lead times.
Quality craftsmanship is imperative to success in overseas production. To foster such quality, plants in
Japan have been positioned as mother plants with the responsibility of providing instruction to overseas
child plants to guarantee that they can deliver the expected level of quality in their craftsmanship. The
in-house development and production of key components supports Komatsu’s ability to provide uniform
levels of quality on a global basis.
Furthermore, Komatsu has nine mid-sized hydraulic excavator production sites around the world, which
it uses to practice cross-sourcing in response to demand fluctuations. We are able to engage in such
cross-sourcing because each of these production sites uses the same blueprints and can deliver the
same level of quality. Cross-sourcing has the added benefit of improving corporate resilience by
functioning as a business continuity provision for hedging against unforeseen circumstances.
Komatsu’s global production system is supported by our commitment to putting quality first and
enables us to deliver products that satisfy customers in terms of quality, delivery turnaround, and costs.
Global Cross-Sourcing Scheme for Hydraulic Excavators
Development of a framework for supplying markets worldwide from production sites across the globe
Cross-sourcing between overseas production sites
Sourcing from Japan
Komatsu Manufacturing Rus
Komatsu UK
Komatsu America Chattanooga Plant
Komatsu Shantui Construction Machinery
Komatsu Changzhou Construction Machinery
Japan
Komatsu India
Bangkok Komatsu
Komatsu Indonesia
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A Century of Creating the Workplaces of the Future
Business Segments
Consolidated Net Sales
Operating Income / Operating Income Ratio
Net Income Attributable to Komatsu Ltd. /
Return on Equity
2,725.2
2,444.8
¥2,189.5 billion
397.8
14.6%
250.7
10.3%
¥167.3 billion
7.6%
256.4
14.7%
153.8
¥106.2 billion
8.6%
5.8%
FY2018
FY2019
FY2020
FY2018
FY2019
FY2020
FY2018
FY2019
FY2020
Breakdown of Net Sales by Segment
FY2020 Construction, Mining and Utility Equipment Business Sales
(to Outside Customers) by Region
FY2020 Consolidated
Net Sales
¥ 2,189.5 billion
Strategic Markets
53%
Africa
Middle East
Oceania
Asia
China
CIS
5%
2%
12%
7%
7%
6%
Latin America
15%
Traditional Markets
47%
Japan
North America
Europe
15%
23%
9%
FY2020
¥ 1,961.2 billion
Construction, Mining, and Utility
Equipment Business
¥ 1,961.2 billion
Komatsu supplies a wide range of products, services, and solutions including construction and mining
equipment for use in construction and mining workplaces around the world as well as forklift trucks, forest
machines, recycling equipment, and tunneling machines. We have established a position as the interna-
tional leader in the construction and mining equipment field by delivering unrivaled quality and technologi-
cal innovation together with this full lineup.
Retail
Finance
Dump truck
¥ 58.3 billion
Komatsu conducts a retail finance business aimed at helping reduce customers’ funding burdens
and otherwise assisting in the purchase of its products. Our strengths in this field include the preven-
tion of overdue debt through effective utilization of Komtrax (location information, operating status infor-
mation, engine locks, etc.) technologies, swift credit screening, and competitive financing
conditions. These strengths have enabled us to build long-term relationships with customers.
Industrial Machinery
and Others
¥ 169.9 billion
The industrial machinery and others business stands alongside the construction, mining, and utility equip-
ment business as a core business of Komatsu. Offerings in this business include the large presses used
to mold automobile hoods and side panels as well as sheet-metal machines, machine tools, and light
sources for semiconductor lithography systems (excimer lasers). In this business, we also contribute to
the business activities of various customers through production of specialty equipment for Japan’s
Ministry of Defense.
Large press
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A Century of Creating the Workplaces of the FutureTop Management’s Views on Komatsu’s Management Issues and Strategies for the Next CenturyEvolution of Business Model for Creating the Workplaces of the FutureResolution of ESG Issues through Growth StrategiesCorporate Profile Top Management’s Views on Komatsu’s Management Issues and Strategies for the Next Century
Message from the President
Hiroyuki Ogawa
President and Chief Executive Officer
Representative Director
Komatsu will remain committed to quality and reliability as it
seeks to create value through manufacturing and technology
innovation to empower a sustainable future where people,
businesses, and our planet thrive together by developing ideal
workplaces through ongoing responses to the needs of society
and of customer workplaces.
Komatsu’s Course for Responding to Workplace Needs
Komatsu was established in Komatsu City, Ishikawa Prefecture in
holders who have supported and aided us thus far.
1921, the Company has faithfully exercised its management
Komatsu’s main construction and mining equipment prod-
principle, which entails committing ourselves to quality and
ucts are used at infrastructure and natural resource develop-
reliability and maximizing the total sum of trust given to us by all
ment sites and other workplaces that contribute to social
stakeholders and society. We have continued striving to develop
foundations. Our business is founded on responding to work-
ideal workplaces by responding to the needs of customers and
place needs through the provision of high-quality services that
society over the century that followed. This dedication has
customers can use with peace of mind over the long term as
enabled Komatsu to reach the 100th anniversary of its founding,
well as finely tuned services offered across product lifecycles
which we celebrated this year. Please allow me to express my
and solutions that fundamentally resolve customer workplace
sincere appreciation to the customers, shareholders, distribu-
issues. Today, Japan faces issues surrounding its dwindling and
tors, suppliers, business partners, employees, and other stake-
aging workforce. Looking at the world as a whole, workplaces are
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being impacted by rising concerns over climate change and
preventive maintenance. We are thereby able to propose the ideal
other increasingly serious environmental issues. These factors
timing for equipment overhauls or parts replacements. In this
are creating a strong need to improve the safety and productiv-
manner, Komatsu develops a business that does not end with
ity of workplaces. Meanwhile, the COVID-19 pandemic is
the sale of products but rather extends providing value to our
prompting construction workplaces to seek ways of preventing
customers across the entire value chain (please see page 10).
workers from coming in close contact with one another, stimu-
Another key factor augmenting the unique strengths of
lating a rise in demand for automated equipment.
Komatsu is its ability to combine solutions such as its
Komatsu will work to actively address such changes in the
Autonomous Haulage System (AHS) and Smart Construction. It
operating environment while pursuing ongoing growth by con-
is crucial to develop a business model through which we provide
tinuing to act based on its commitment to quality and reliability
solutions to resolve customer issues and also supply products
over the next century. The strengths we have fostered as a man-
that are highly compatible with those solutions. This is especially
ufacturing company thus far will be central to this pursuit.
important given that newer manufacturers are growing in techni-
I would now like to explain Komatsu’s strengths in a little
cal prowess, meaning that we can no longer succeed purely by
more depth. An important policy of the Company is to develop
improving the performance of our products.
and produce the key components that support the quality and
Komatsu looks to create value through manufacturing and
reliability of its products in-house. This policy makes it possible
technology innovation to empower a sustainable future where
for us to take a flexible, component-level approach toward
people, businesses, and our planet thrive together. My approach
improving the durability of construction equipment as well as
toward achieving this goal will include manufacturing activities
toward the planning of construction equipment that accommo-
that pursue the quality and reliability Komatsu has pursued over
dates contemporary needs related to the electrification and
the past century. This is the course that Komatsu must take in
automation of equipment. Moreover, we equip components with
the future.
sensors that can gather data to be used to predict component
lifespans through Komtrax (Komatsu Machine Tracking System).
Predicting component lifespans makes it possible to perform
Impact of the COVID-19 Pandemic on Business
The ongoing COVID-19 pandemic made for a challenging oper-
the sales front, meanwhile, we sought to maintain a consistent
ating environment characterized by economic stagnancy in
supply of products, parts, and services to customers. To this
FY2020. Throughout this pandemic, the Komatsu Group has
end, distributors used online venues to continue sales activities
placed as its top priority the health and safety of its customers,
while utilizing a combination of regular commuting and telecom-
business partners, community members, employees, and their
muting. Other measures included revising supply routes and
families as we took steps to prevent the spread of the virus
shift structures. Operations are gradually returning to normal in
based on government policies in the relevant countries.
various regions. At the same time, however, COVID-19 case
Moreover, we worked to fulfill our responsibilities to customers
numbers have once again begun rising in some regions. It will
involved in businesses that support social infrastructure (essen-
therefore be prudent to carefully monitor trends in the pandemic
tial businesses) by continuing to supply products, parts, and
as we move forward with our business activities.
services to customers while implementing thorough measures
As for the increased impacts of the COVID-19 pandemic on
to prevent the spread of COVID-19.
markets, construction and mining equipment demand rose
Cross-sourcing of products and parts and global procure-
throughout FY2020 in China, where the pandemic was quickly
ment have long been an element of our approach toward
brought under control and where the government has been
absorbing the impacts of demand and foreign exchange rate
implementing economic stimulus measures. In other regions,
fluctuations (please see page 12). We were thereby able to adapt
demand was down until the second quarter, but steady recovery
when the pandemic forced us to halt production, primarily at
in demand was seen centered on construction equipment in the
overseas plants, in April and May 2020; by procuring from alter-
third quarter and beyond as overall market demand picked up in
native sources and reallocating inventories, we managed to
conjunction with the resumption of economic activities.
minimize the impacts of these halts on overall production. On
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A Century of Creating the Workplaces of the FutureTop Management’s Views on Komatsu’s Management Issues and Strategies for the Next CenturyEvolution of Business Model for Creating the Workplaces of the FutureResolution of ESG Issues through Growth StrategiesCorporate Profile
Steady Progress in Priority Initiatives Leading Up to Final Year of
Mid-Term Management Plan
The DANTOTSU Value – FORWARD Together for Sustainable
developing platforms for optimizing mining operations along with
Growth three-year mid-term management plan is slated to con-
systems for remote operation of large-scale hydraulic excavators
clude with FY2021.
(PC7000). At the same time, we have commenced initiatives for
Looking first at the progress of our priority initiatives up to
responding to the rising global concern regarding climate
FY2020, we have been accelerating the promotion of digital
change, such as verification tests for electrified small and
transformation at construction workplaces with our “Smart
medium-sized hydraulic excavators and the development of
Construction Digital Transformation” solution. Specifically, we
electrified super-large dump trucks for mining applications.
have been soliciting this solution’s ability to optimize customers’
Meanwhile, efforts to develop sustainable, cyclical businesses
construction procedures while using the Smart Construction
included promoting smart forestry and the mechanization of
Retrofit Kit to endow conventional construction equipment with
processes encompassing the planting, cultivating, and harvest-
ICT functionality in Japan. In the mining business, more than 350
ing of trees in the forestry machinery business. FY2020 also saw
AHS units were installed as of March 31, 2021. We are also
the start of operations at a new remanufacturing factory in South
State of Progress of Focused Activity Items and Challenges for the Next Term and Onward
Three Growth Strategies
Examples of Activities
• Launched “Smart Construction Digital Transformation”
• Started installation of Smart Construction Retrofit Kit for hydraulic excavators and application for
mini excavators
FY2020
achievements
• Achieved a total of 352 dump truck units operating under the Autonomous Haulage System (AHS)
• Succeeded in proof of concept verification test for remote operation of a large-scale ICT
1. Value Creation by
bulldozer for mining using commercial 5G
Means of
Innovation
• Started a joint proof of concept verification test for electrification of small- to mid-sized
construction equipment
Challenges for
the Next Term
and Onward
FY2020
achievements
• Promote market expansion and global launch of “Smart Construction Digital Transformation”
solution
• Develop a new open technology platform for mining
• Develop technologies for automation, autonomous operation, electrification, and remote control
• Commercialized the product models under development aimed at complying with
regulations, increasing product capabilities, and being the “DANTOTSU No. 1 in Asia”
• Expanded the forest machinery business (efforts into silviculture growing and cultivating
forest crops and smart forestry)
• Introduced the new FE25-2 and FE30-2 models of electric forklift trucks
• Developed and launched manufacturing equipment for electric vehicle (EV) batteries
Challenges for
the Next Term
and Onward
• Improve the market position of the hard rock mining business
• Build a new business model using next-generation Komtrax
• Continue to promote value chain reforms
• Reform the industrial machinery business (expansion of synergy with the construction
equipment business and growth by capitalizing on core technologies)
2. Growth Strategies
Based on Business
Reform
3. Structural Reforms
for Growth
FY2020
achievements
• Selected for “DX Grand Prix 2020”
• Constructed a new remanufacturing plant in South Africa to strengthen value chain operations
• Started construction of new seal ring factory at Himi Plant
Challenges for
the Next Term
and Onward
• Promote work process reforms using ICT and IoT
• Promote next-generation plants and plants with zero impact on the planet and workers
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Africa as part of our remanufacturing (“Reman”) business, another
awarded the Company with A ratings for both climate change
sustainable, circular business. In our underground soft rock
and water risks. FY2021 will be the final year of the mid-term
mining business, we sold unprofitable product lines and reorga-
management plan, and we will thus be steadily yet boldly advanc-
nized our production network to optimize production capacity as
ing the priority measures defined for the plan’s three growth
part of our structural reforms.
strategies with the aim of developing a corporate constitution
In regard to environmental, social, and governance (ESG)
that is able to withstand the changes in market demand. We will
initiatives, smooth progress was made in measures for accom-
do this while prioritizing measures by examining the cost perfor-
plishing our CO2 emissions reduction and renewable energy use
mance and strategic value of each measure.
targets. These efforts led to the selection of Komatsu for inclu-
sion in the Dow Jones Sustainability Indices. In addition, CDP
Further Growth and Overseas Expansion Driven by Smart Construction
and Partnerships
Smart Construction was launched in 2015 as a solution for
thereby realizing drastic improvement in the safety, productivity,
addressing social issues such as those related to the aging of
and environmental performance of the entire workplace.
operators and labor shortfalls in Japan. This solution gave rise to
Seeking to further accelerate this steady evolution in Smart
a solutions business aimed at drastically improving workplace
Construction, we reached an agreement in April 2021 to estab-
productivity by organically linking entire workplaces through ICT.
lish a joint venture company named EARTHBRAIN Ltd. together
Moreover, Komatsu launched “Smart Construction Digital
with NTT DOCOMO, INC., Sony Semiconductor Solutions
Transformation,” a solution comprising four new IoT devices and
Corporation, and Nomura Research Institute, Ltd.
eight new applications, in April 2020. While the previous version
EARTHBRAIN also looks to facilitate the further growth of
of Smart Construction only digitized part of the construction
Smart Construction by accelerating its deployment in the princi-
process (“vertical digitization”), these new IoT devices and appli-
pal overseas markets of Europe, the Americas, and Australia.
cations will allow for digitization of the entire process (“horizontal
digitization”). This will enable workplace operations to be opti-
mized by synchronizing the real workplace with its digital twin,
Identification of material issues (materiality) for the future based on input from a
wide range of stakeholders
In light of the massive changes seen in the operating environ-
developments such as the COVID-19 pandemic; and human
ment, Komatsu revised its material issues for the first time in a
rights issues. Environmental and energy issues are also a top
decade to clarify the priorities it should emphasize in pursuing
priority, meaning that sustainability, climate change, and decar-
sustainable growth over the next century.
bonization will be a key focus going forward. The move toward
The need to develop low-carbon and zero-emissions prod-
carbon neutrality is accelerating on a global scale. Japan as well
ucts is much greater than it was 10 years ago. Evolving corpo-
has announced its goal of realizing a decarbonized society by
rate governance systems and accommodating diversity have
achieving a state of carbon neutrality by 2050. Komatsu will
also become more important. At the same time, we are pressed
carefully consider its approach toward tying carbon neutrality
to address issues in areas where global trends have changed
initiatives to business growth, or, in other words, how it will
significantly in comparison to the projections of the mid-term
achieve sustainable growth by generating a positive cycle of
management plan. Examples of such issues include economic
resolving ESG issues and improving earnings as described in the
sanctions and trade friction, such as those arising out of the
mid-term management plan.
conflict between the United States and China; risks of
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Komatsu’s Long-Term Vision forwards Achieving Carbon Neutrality in 2050
Under the current mid-term management plan, Komatsu has
be advancing technology and other development projects in
defined the targets of reducing CO2 emissions by 50% com-
preparation for the commercialization of such equipment.
pared with 2010 and of raising the ratio of renewable energy use
In addition to products, we are also looking to contribute to
to 50% by 2030. These targets are to be accomplished using
carbon neutrality through solutions like Smart Construction and
equipment that improves productivity, conserves energy, and
AHS that help realize massive improvements in the productivity
reduces environmental impacts at production sites and solutions
of, and subsequently reductions in the CO2 emissions from, cus-
for increasing the productivity of customer workplace. Efforts to
tomer workplaces.
accomplish these targets are moving forward smoothly.
Another focus will be the forestry machinery business.
The technical hurdle needing to be cleared in order for
Komatsu aims to develop this business into a cyclical business
Komatsu to work toward the long-term target of achieving
that underpins forestry. To this end, we are promoting smart
carbon neutrality by 2050 is massive. At the same time, electri-
forestry, which entails using machinery and ICT for processes
fied equipment is a market that will not be truly viable until further
encompassing the planting, cultivating, and harvesting of trees.
down the line, and there are some emerging countries that have
Such machinery includes logging machines as well as machines
not introduced exhaust gas regulations. However, carbon neu-
that flatten logged land and machines that automatically plant
trality initiatives are accelerating centered on developed coun-
trees on the flattened land. Moreover, achieving carbon neutrality
tries, and it is likely that needs related to carbon neutrality will
by 2050 requires that we focus both on reducing CO2 emissions
arise in strategic markets* in the future. Accordingly, it is crucial
and on absorbing the CO2 that is emitted. For this reason,
for us to develop a clear technology roadmap for working toward
Komatsu’s forestry machinery business has significant potential
carbon neutrality.
to contribute to society by supporting and accelerating the
In terms of products, we have made consistent efforts to
forest regeneration cycle. The forestry machinery market is cur-
reduce fuel consumption and improve efficiency. Going forward,
rently growing by about 3% a year, and we therefore believe that
however, it will be important to augment these efforts by working
our forestry machinery business presents significant potential for
to electrify and automate equipment. Komatsu has already had
future growth.
success in developing equipment with reduced environmental
* Positioning of markets by the Komatsu Group:
impacts, including mid-sized hybrid hydraulic excavators and
diesel–electric super-large wheel loaders and dump trucks, and
we look to further build upon these technologies going forward.
At the same time, we anticipate that there will be a need to
develop equipment that is able to accommodate any drive
source, including fuel cells and hydrogen engines, in the future.
Accordingly, an important challenge over the next three years will
Traditional markets: Japan, North America, Europe
Strategic markets: China, Latin America, Asia, Oceania, Africa, Middle East, CIS
For more information on Komatsu’s carbon neu-
trality initiatives, please refer to Special Feature :
Komatsu’s Vision for the Workplace of the Future
(page 26).
Creation of Ideal Workplaces Together with Stakeholders over the Next Century
Over the next century, Komatsu will continue to commit to quality
Financial Disclosures, and other initiatives as we work to fulfill
and reliability, as it has done over the past century. Seeking to
our obligations to society and the environment as a global
create ideal workplaces, we will generate new value through
company. I continue to thank all of our stakeholders and ask for
manufacturing and technological innovation to help shape a
your ongoing support.
future where people, businesses, and our planet thrive together.
This is the approach we will take in accomplishing our ultimate
goal: achieving sustainable growth together with all of our
stakeholders.
We will also proactively participate in the United Nations
Global Compact, the World Business Council for Sustainable
Development, the Task Force on Climate-related
Hiroyuki Ogawa
President and Chief Executive Officer
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Online Meetings with Individual Shareholders (Japanese only)
In the past, Komatsu has held briefings in locations across Japan as venues through which it can explain the circumstances
surrounding the Company and its future course directly to shareholders. In FY2020, however, these briefings took place online
for the purpose of preventing the spread of COVID-19. In FY2021, we plan to hold an online meeting with shareholders as
detailed below. At this meeting, members of senior management will provide an overview of the Komatsu Group and discuss the
progress of our mid-term management plan as well as the Company’s interim financial outlook and full-year financial outlook.
Details of FY2021 Online Meeting with Individual Shareholders (Plan)
Time and Date
7 pm–8 pm(JST), December 14, 2021 (Tuesday)
The viewing website and viewing methods will be described in the interim business reports scheduled for
Method
distribution in early December 2021 (in Japanese only) and the Shareholder Events section of our corporate
website (in Japanese only). The briefing will be viewable from computers, smartphones, and tablets.
Attendance
Requirements
Open to shareholders of the Company as of September 30, 2021
1. Explanation of mid-term management plan progress, interim financial results, and full-year financial
Agenda
outlook
2. Question and answer session
* The meeting will be held only in Japanese. The materials in English will be posted on Komatsu's corporate website after the meeting. Please visit our website at Interview with the
President section of Investor Relations.
Reference
FY2020 Online meeting with individual shareholders
Presenters
Hiroyuki Ogawa, President and Chief Executive Officer
Takeshi Horikoshi, Senior Executive Officer and CFO
Web
For videos and materials from the FY2020 online shareholder briefing, please refer to the Shareholder Events section of our corporate website
(in Japanese only).
https://www.komatsu.jp/ja/ir/shareholder/event
Video Interviews with the President
Web
Videos of interviews with President Hiroyuki Ogawa have been made available on Komatsu’s corporate website covering topics including Komatsu’s strengths,
future outlook, and mid-term management plan progress.
https://www.komatsu.jp/en/ir/library/interview-movie
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A Century of Creating the Workplaces of the FutureTop Management’s Views on Komatsu’s Management Issues and Strategies for the Next CenturyEvolution of Business Model for Creating the Workplaces of the FutureResolution of ESG Issues through Growth StrategiesCorporate Profile Top Management’s Views on Komatsu’s Management Issues and Strategies for the Next Century
Message from CFO
Takeshi Horikoshi
Director and Senior Executive Officer
CFO
Komatsu was born in Ishikawa Prefecture, Japan in 1921. Over the
predecessors navigated these changes by building foundations for
century that followed, Komatsu has grown into a global company
financial and capital strategies that remain viable even today.
targeting net sales of ¥3 trillion and overseeing a corporate group
Komatsu’s resilience to maintain a certain performance in the current
comprising 254 other companies (212 consolidated subsidiaries and
challenging operating environment caused by the COVID-19 pan-
42 affiliated companies accounted for by the equity method) as of
demic is thanks to our predecessors. Let me express the sincere
March 31, 2021.
appreciation I feel for the efforts of our predecessors as I explain
The Company’s operating environment has continued to trans-
some of the innovative practices they introduced.
form over the years, and our accounting and finance department
1. Transformation of Business and Response of Accounting and Finance
Departments
(1) Business Strategies Leading to Selection and
within the Company who suggested that we scale back construction
Concentration
equipment operations to the point of half of total net sales. The
Today, more than 80% of Komatsu’s net sales come from overseas.
concept of a conglomerate discount did not exist at the time, and
However, this was not always the case; up until the 1960s the major-
Komatsu was thus driven to develop new businesses and diversify its
ity of sales were generated in Japan. It was in the 1970s that we
operations in the same manner as other companies in Japan.
began our full-fledged expansion into overseas markets. At this time,
We changed course after the turn of the century, moving away
Komatsu took the approach of engaging in M&A activities while
from the diversification of our business to instead practice selective
honing its technologies for serving these markets to bolster its prod-
focus. Komatsu thus began concentrating management resources
uct lineup and reinforce the foundations for its export businesses.
on its construction, mining, and utility equipment business as well as
Initially, overseas sales were mainly composed of exports from
on the industrial machinery and others business that it had continued
Japan. However, we began ramping up local production in overseas
since its founding and in which it could expect synergies with the
markets in the 1980s in order to accommodate the growth of over-
aforementioned construction, mining, and utility equipment business.
seas demand and account for the rising value of the yen. In the late
There were three reasons behind this change in strategy. The first
1990s, when we were augmenting our global distributor network,
was the fact that we recorded the first operating loss in FY2001
overseas sales completely surpassed domestic sales.
since our founding. The second was that the concepts of cost of
In the 1990s, demand grew stagnant in our traditional markets of
capital and return on equity (ROE) were starting to become main-
Japan, the United States, and Europe as these markets matured. This
stream. The third was that Komatsu’s electronics business began to
trend gave rise to a widespread belief that growth could not be antici-
place significant stress on the Company’s management in the late
pated in the construction equipment market. In fact, there were many
1990s. Maintaining and pursuing growth in the electronics business
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required massive investments, in amounts that accounted for the
funds from overseas markets. Furthermore, we have established the
majority of capital investments in any given year, despite the business
American depositary receipt program for convertible corporate
itself not even generating 10% of total net sales. Based on a careful
bonds issued in the United States in 1967, and this program contin-
examination, the decision was reached to implement structural
reforms that entailed the gradual sale of Komatsu Construction
Co.,Ltd, Advanced Silicon Materials LLC, Komatsu Electronic Metal Co.,
ues to contribute to improved convenience for overseas investors
and increased recognition for the Company even today. In terms of
tax, Komatsu began examining advance pricing agreements (APAs)—
Ltd., and outdoor power equipment business of Komatsu Zenoah Co.
ahead-of-time tax payment agreements based on appropriate trans-
and so on.
fer pricing methodology—in conjunction with an increase in
Throughout this process, Komatsu’s accounting and finance
investment in a joint venture company (currently, Komatsu America
departments acted in accordance with the Company’s business
Corp., a wholly owned subsidiary), established in 1988 with Dresser
strategies. For example, the Company began disclosing consolidated
Industries, Inc., of the United States. We reached our first APA
financial statements based on generally accepted accounting prin-
between Japan and the United States in 1996, and then proceeded
ciples from the United States in 1963 with the goal of procuring
to expand the scope for which these agreements were used to include
History of Komatsu’s Business Strategies and Earnings and Performance Management
■ Domestic sales ■ Overseas sales
■ Operating income ratio ■ Exchange rate
1971
Smithsonian Agreement
1985
Plaza Agreement
Fixed exchange rate system
(¥360 to USD1)
1973
Floating exchange rate system
(¥/USD)
360
240
120
0
FY2001
First operating loss
since founding
(%)
20
15
10
5
0
–5
-10
1970
1970
Centered on Japan
Expansion of Exports
1980
1980
1990
1990
Expansion of overseas
production
2000
2000
2010
2010
2020
2020
(FY)
Diversification
Selective Focus and Global Consolidated Management
(Billions of yen)
3,000
2,000
1,000
0
1960
1960
Business
strategies
Managerial accounting based on full-cost accounting
Managerial accounting based on direct-cost accounting
Earnings management
Performance management
ROE
ROIC
Borrowing limit management, net debt-to-equity ratio
Growth
Profitability
Efficiency
Financial
position
countries such as Australia and Belgium. Eventually, these APAs come to
operation management system as a standard feature on the Komatsu
account for around half of the Company’s overseas sales on a non-
products that serve as collateral for our retail finance products. Today,
consolidated basis.
we work to safekeep our credits by taking advantage of our strengths,
The retail finance business was separated from the construction,
Komtrax technologies (location information, operating status informa-
mining, and utility equipment segment in 2016, making for the
tion, engine locks etc.), and the retail finance business plays a role of
Company’s current three business segments. In the retail finance
promoting sales of construction and mining equipment.
business, we provide financial products for the users of Komatsu
products. This business dates back to 1988, when we established a
(2) Improvement of Corporate Value through
joint venture with Dresser Industries, Inc. At this time, we also incorpo-
Structural Reforms
rated into the Group a retail finance company under the control of
When undertaking business reorganizations and M&A activities in
Dresser Industries, Inc. (currently, Komatsu Financial Limited
accordance with our policy of selective focus, we have always
Partnership). We were cautious in expanding our retail finance busi-
emphasized creating beneficial situations for sellers and purchasers
ness up until the early 2000s. However, we began developing this
as well as for the employees who would be relocated as a result of
business in countries outside of the United States in 2004 in conjunc-
the transaction in question.
tion with the introduction of the Komtrax construction equipment
Potential M&A transactions are examined by looking at the
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A Century of Creating the Workplaces of the FutureTop Management’s Views on Komatsu’s Management Issues and Strategies for the Next CenturyEvolution of Business Model for Creating the Workplaces of the FutureResolution of ESG Issues through Growth StrategiesCorporate Profile
importance to business strategies and comparing return on invest-
results. Komatsu currently boasts net sales surpassing ¥2 trillion.
ment (ROI) and weighted average cost of capital (WACC) to make a
Organic growth was a major part of this accomplishment, but we
decision of investment. Furthermore, we focus on compatibility with
cannot deny the significant contributions from M&A activities. As part
the culture of the acquired company to better integrate processes
of post-merger integration, we work to ensure that the anticipated
and facilitate a sense of cohesion. After closing the acquisitions, we
synergies are realized and that a sense of cohesion is achieved. It is
regularly monitor their contributions to improving our group-wide
therefore not uncommon for the employees not to know the fact of
corporate value as we compare ROI and WACC of the acquired com-
the acquisition after several years.
panies, and check on synergy effects on consolidated business
2. Enhancement of Financial and Capital Strategies
(1) Profitability and Efficiency Policies
Under the current mid-term management plan, Komatsu has defined
managerial accounting practices, in which unit costs vary by produc-
tion volume, to incorporate the direct-cost accounting practices used
four consolidated performance targets for growth (sales growth rate),
overseas, in which costs are calculated centered on variable costs.
profitability (operating income ratio), efficiency (ROE), and financial
Accordingly, new managerial accounting practices were implemented
position (net debt-to-equity ratio). The process of trial and error that
in 2002, in which definition of variable costs and fixed costs have been
has brought us to where we are today is intrinsically linked to the M&A
standardized on a global basis. This change allowed us to respond to
activities described in the “Transformation of Business and Response
fluctuations in demand (sales) through swift action. These standards
of Accounting and Finance Departments” section above.
were also incredibly simple and easy to understand for overseas
Through the acquisitions of overseas companies conducted after
employees, and, since their introduction, the separation of costs from
the 1970s, together with technologies and other assets, Komatsu
growth has become the foundation for Komatsu’s cost management
absorbed overseas managerial accounting practices that differed from
approach. With these standards, we have been able to entrench
the full-cost accounting practices traditionally used in Japan. A sharp
throughout the Group a policy of reducing costs while conducting
drop in sales after the 1997 Asian financial crisis made us recognize
growth investments and thereby curbing increases in fixed costs even
our weakness, ratio of selling, general and administrative (SG&A)
as sales rise.
expenses to sales, that was behind our rivals and eventually led to an
Next, I would like to talk about how we manage the performance
operating loss in FY2001. This weakness made structural reforms for
of subsidiaries. Komatsu is a manufacturer of construction and
cutting fixed costs, through means such as reducing the number of
mining equipment and industrial machinery, and it thus has a multi-
subsidiaries, a pressing task. As the Company shifted toward selective
faceted business model encompassing development, manufactur-
focus in its business strategies, we reviewed our traditional full-cost
ing, sales, and retail finance. Accordingly, ROE, an indicator that
Performance Management KPIs
Comprehensive KPIs for managing consolidated performance
(Mid-term management plan targets)
KPIs for management of subsidiaries with vari-
ous business models (Financial leverage components
covered by management of borrowing limits)
Net income attributable to
Komatsu Ltd. ÷ Net sales
Operating income ÷ Net sales
ROE
Profitability
ROIC
Net income attributable to
Komatsu Ltd.
Shareholders’ equity
• Separation of costs from growth
• Exhaustive fixed cost management
Operating income
Invested capital (= Working capital + Tangible fixed assets)
Net sales ÷ Total assets
Net sales ÷ Invested capital
Asset Efficiency
• Working capital: Inventory/receivable turnover periods (slow-moving inventories, overdue receivables)
• Tangible fixed assets: Assessment of investment
Net sales ÷ Shareholders’
equity
Financial
Leverage
• Consolidated-basis optimization of fund procurement
• Management of net debt-to-equity ratio based on business characteristics
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comprehensively accounts for profitability, asset efficiency, and
interest rate fluctuations.
financial leverage, is used for consolidated basis management.
To address funding risks, we seek to reliably procure funds by
However, trying to apply ROE as a management indicator for each
securing diverse funding sources and maintaining balanced distribu-
subsidiary would lead to inequity as capital levels can be different
tions of direct and indirect, short-term and long-term, and variable
based on factors such as differences in business models and legisla-
interest rate and fixed interest rate borrowings. The Company has
tive environments in the countries where subsidiaries are located. In
also implemented a global cash management system that links
addition, the construction and mining equipment business is highly
Japan and other countries of operation to complement regional-
volatile, making effective management of receivables and inventory
basis funding activities and improve consolidated funding efficiency
assets imperative. Based on these considerations, we have been
under normal circumstances while also serving as a safety net by
using ROIC for internal management purposes since 2017 to com-
allowing funds to be distributed to overseas subsidiaries from the
plement prior profitability management practices. Operating income
head office in Japan in emergency circumstances.
is used as the numerator when calculating ROIC while the total of
We believe it is important to maintain a sound financial position in
working capital and tangible fixed assets, which represents how
order for us to achieve sustainable growth while being free from
invested capital is utilized, is used as the denominator. Defining ROIC
changes in market demand. The net debt-to-equity ratio is monitored
in this manner allows us to provide timely feedback to the divisions
as an indicator of financial soundness on a consolidated basis while
responsible for investments with regard to issues and the extent of
borrowing limits and financial benchmarks are set and managed on
improvement. Each subsidiary reports graphs indicating changes in
an individual-subsidiary level. On March 31, 2021, the consolidated
ROIC on a monthly basis to track their conditions.
net debt-to-equity ratio was 0.35. This ratio is 3.69 when looking at
Inventory assets are accounted for ROIC, and maintaining an
the retail finance business alone, but this level is still within the prede-
appropriate level of inventories requires coordination between sales
termined acceptable range for leverage. We are working to mitigate
and production divisions. Komatsu has therefore developed a culture
foreign exchange rate and interest rate fluctuation risks by matching
of mutual coordination and check between sales and production
lending and funding currencies and interest rates and periods. At the
divisions, and HANSEI, a coined word from the initials of sales (Han-
same time, we are utilizing the aforementioned Komtrax technologies
bai) and production (Sei-san) in Japanese, has long been familiar in
to safekeep our credits.
Komatsu. As a result of coordinated efforts between sales and pro-
Furthermore, the Company thoroughly enforces risk manage-
duction divisions, we have in place global HANSEI operation centers
ment policies across the Group. We therefore do not utilize schemes
exactly for the purpose of advancing improvement activities targeting
only for the purpose of minimizing tax payments in global operations
both of these areas. Specifically, a center for equipments was estab-
(appropriate taxes are to be paid based on our business), nor do we
lished at Osaka Plant in April 2011 and a center for parts was set up
maintain cash holdings at branches and sites (to eliminate compli-
at Oyama Plant in July 2015, where we are increasing the accuracy of
ance risks) nor holding shares in listed companies (to mitigate stock
demand projections and sharing information in an integrated manner
price fluctuation risks).
to maintain appropriate inventory levels on a global basis while pre-
venting loss in sales opportunities.
(3) Group-Wide Dissemination of Financial and
In this manner, one of Komatsu’s strengths is its ability to create
Capital Strategies
and expand free cash flow from the perspectives of both profitability
Komatsu has proceeded to accelerate its growth through M&A activi-
improvements (separation of costs from growth) and efficiency
ties. However, we did not initially have a clear policy for shareholding
improvements (inventory management).
structure. It was therefore not uncommon situation that subsidiaries
were investing in companies in respective region where Japanese
(2) Financial Position and Risk Management Policies
There were cases in which the head office would practice speculative
headquarters also had investments, even as recently as the mid-
2000s. This changed in 2007, when we implemented a policy of
asset management back in the days when production was centered
consolidating investments in overseas Group companies within
on Japan. However, we later put a stop to speculative financial activi-
regional headquarters for the purpose of more efficiently utilizing
ties in conjunction with the globalization of our business, instead
capital and strengthening governance. At that time, we appointed a
choosing to focus on improving our financial position and hedging
total of five regional headquarters, one for the Americas, including
risks on a group-wide basis.
Latin America, one for Europe, one for China, one for Indonesia, and
Our basic policy for managing foreign exchange rate and interest
one for other parts of Asia. These five companies provided funding
rate fluctuation risks is to apply natural hedges through ordinary opera-
and other back-office support in their respective regions while also
tions. For example, manufacturing products in locations close to the
furnishing a check function backed by investment. In the years that
markets where they will be sold allows us to match sales and costs on a
followed, Komatsu went on to acquire various global companies and
currency basis , and procuring funds on a regional basis allows for such
business, such as Partek Forest AB (currently, Komatsu Forest AB)
currency matching with regard to assets and liabilities. For risks that
and Joy Global Inc. (currently, Komatsu Mining Corp., that made it
cannot be covered through natural hedges, we utilize financial products
difficult for these five companies to cover the expanded business.
(derivatives) for mitigating the impacts of foreign exchange rate and
This development prompted us to redefine our regional holding
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A Century of Creating the Workplaces of the FutureTop Management’s Views on Komatsu’s Management Issues and Strategies for the Next CenturyEvolution of Business Model for Creating the Workplaces of the FutureResolution of ESG Issues through Growth StrategiesCorporate Profile
Shareholding Structure and Matrix Management
–Performance management by responsible business division and shard services by regional headquarters–
Komatsu Ltd.
Regional
headquarters
12 companies
North
America
1 company
Latin
America
2 companies
Europe/CIS
2 companies
China
1 company
Asia
3 companies
Oceania
1 company
Africa/Near
and Middle
East
2 companies
Regional
subsidiaries
Acquired
conglomerates
Head office
Head office
Oversight of worldwide
Group companies by respec-
tive responsible business
divisions of Komatsu Ltd.
Investment in subsidiaries:
Consolidated by region,
investment in conglomer-
ates by regional headquar-
ters in the same region as
conglomerate head office
Horizonal axis: Ongoing
oversight of acquired con-
glomerates by respective
head office
Vertical axis: Enhancement of management streamlining through shared back-office
support (compliance, legal affairs, finances, human resources, ICT, etc.) provided by
regional headquarters
companies in 2019 to better match the actual circumstances of our
three-year plan. Instead of numerical targets, we have therefore
business, leading us to have the current 12 regional headquarters. To
chosen to set the more abstract targets of achieving a growth rate
manage the performance of this expanding scope of companies, the
above the industry’s average for growth and the industry’s top level
responsible business divisions of Komatsu Ltd. oversee companies
for profitability and financial position.
belonging to their respective business areas. Meanwhile, the head
The decision to set a target for growth (net sales growth rate) in
office of acquired conglomerates are responsible for overseeing the
the mid-term management plan is based on our strong commitment
businesses of their worldwide subsidiaries while the 12 regional
to continue growing through a combination of organic growth and
headquarters manage funding on a regional basis and offer back-
inorganic growth by means of M&A activities. Growth rates are also
office support. This setup makes for a matrix management approach.
indicators for measuring our position within the industry. Our growth
Today, approximately 70% of Komatsu Group employees are
target is aggressive and significant pressure on Komatsu’s manage-
working overseas. We have thus adopted globally standardized rules
ment team, but this pressure is necessary to prevent us from falling
and simplified management procedures for core financial and capital
into a state of overall decline.
strategies, and these practices have been entrenched throughout
The operating income ratio is also an important indicator for dem-
the Group via the aforementioned matrix. This approach is taken to
onstrating the meaningfulness of a company. We have set a target for
make our practices easier to understand for employees in operating
this indicator based on our responsibility as the industry leader. In the
divisions worldwide and to facilitate the integration and cohesion of
late 1980s, Komatsu caused damage to its own market by becoming
acquired companies and businesses.
involved in excessive price wars due to an overemphasis on its share
in the domestic market. Based on this experience, we made the dif-
(4) Pursuit of Further Growth
Komatsu has not established numerical targets for growth, profitabil-
ficult decision to raise prices as we focused on our core business after
recording an operating loss in FY2001. Combined with the aforemen-
ity, and financial position in its mid-term management plan. We had
tioned cost management practices, this approach has enabled us to
set such targets in the past. However, demand is incredibly volatile in
improve our operating income ratio. Today, we emphasize profitability
our business; in the mining equipment business, for example,
when developing marketing strategies, whether these be for our tradi-
demand can fluctuate by nearly 30%. As a result, past numerical
tional markets or for strategic markets.
targets have lost their meaning in the first year of the respective
In our integrated reports, we have disclosed key performance
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indicators (KPIs) linked to environmental, social, and governance
opportunity for stakeholders to develop an understanding of
(ESG) issues for the various projects for advancing the growth strate-
Komatsu and thus helped expand our investor base. Going forward,
gies of the mid-term management plan (please see pages 38 and
we will continue to examine the possibility of issuing green bonds
39). These KPIs are a very viable tool for directly confirming the
and other ESG-related bonds in conjunction with Companywide
progress and benefits of these projects. In addition, the accounting
initiatives for achieving carbon neutrality and electrifying equipment.
and finance departments began aiding in the accomplishment of the
We will also track financial indicators along with ESG and other KPIs
targets for these KPIs through the issuance of Komatsu’s first green
to achieve sustainable growth through a positive cycle of improving
bonds in July 2020. The rising global concern for ESG factors is
and stabilizing earnings and solving ESG issues.
impacting the financial market, specifically through stricter regula-
tions for sustainability-related disclosure by financial institutions and
the need to implement and popularize ESG scoring frameworks.
Amid this trend, the issuance of green bonds served as a new
Item
Amount (millions of yen)
Use of Funds Procured through Green Bonds
Use of funds
Procurement amount (July 2020)
Use in FY2020
Investment in rental equipment assets for popularizing ICT-intensive model
Of which, refinancing
Construction of energy-saving facilities and installation of biomass generation
facilities at domestic factories
Of which, refinancing
Balance as of March 31, 2021
10,000
▲6,854
(▲4,137)
0
(▲2,717)
0
3,146
Two of allocated eligible projects have been in operation, technical center at Ibaraki Plant since October 2020 and test laboratory No.3
at Oyama Plant since January 2021.
Allocation of ¥10.0 billion worth of funds procured through green bonds to be completed within FY2021.
Technical center (at Ibaraki Plant)
Test laboratory No.3 (at Oyama Plant)
Web
Details on green bonds are available on Komatsu’s corporate website.
https://komatsu.disclosure.site/en/themes/191
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A Century of Creating the Workplaces of the FutureTop Management’s Views on Komatsu’s Management Issues and Strategies for the Next CenturyEvolution of Business Model for Creating the Workplaces of the FutureResolution of ESG Issues through Growth StrategiesCorporate Profile Evolution of Business Model for Creating the Workplaces of the Future
Special Feature: Komatsu’s Vision for the Workplace of the Future
Komatsu
future
203X
Creating value through manufacturing
and technology innovation to empower
a sustainable future where people, busi-
nesses and our planet thrive together
Komatsu has released videos illustrating the safe, smart,
clean, and highly productive workplaces of the future it
aims to create. We hope you will take a look at these
videos to see the workplaces we are working to create
together with all stakeholders.
https://www.youtube.com/watch?v=-ikOXOy
Web
ZpH0&list=PLl09JNAS3JlEL7iTnOAM674O6
ZHKn6qZe&index=3
Formation of Komatsu GHG Alliance Together with Four Major Mining Companies
For the purpose of accelerating the reduction of greenhouse gas emissions from mining operations, Komatsu has founded the Komatsu
GHG Alliance together with major mining companies that are also its customers. The founding members of the alliance are Rio Tinto plc,
BHP Group Limited & Plc, National Copper Corporation of Chile (Codelco), and Boliden AB—global top-class, industry-leading mining
companies. The alliance will serve as a framework for the co-creation of value with customers through which we will accelerate the
development of a power agnostic concept truck that can run on a variety of power sources.
Founding Members of Komatsu GHG Alliance
Name
Head Office
Komatsu
Tokyo, Japan
Rio Tinto plc
London, United Kingdom
BHP Group Limited
& Plc
Melbourne, Australia
National Copper
Corporation of
Chile
Santiago, Chile
Boliden AB
Stockholm, Sweden
Power agnostic development truck undergoing testing at test site (Arizona, United States)
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Collaboration with Partners for Accelerating the Creation
of the Workplaces of the Future
Komatsu is collaborating with partners that share its values to accelerate
the creation of the workplaces of the future.
Utilization of NTT DOCOMO’s 5G Service
Komatsu’s First Time Achieving Continuous Discharge of Soil by Improving
Automatic Loading Control as well as Remotely Switching to Multiple
Construction Equipment Units in Operation
PC200i-11 hydraulic excavator being
operated remotely from control pod
(Ishikawa Prefecture)
Web
Please refer to the following video for a demonstration of the
automation and remote operation technologies.
https://www.youtube.com/watch?v=S2me-S4G0PE
Komatsu Field Test Department linked
through 5G services (Oita Prefecture)
In its pursuit of the commercialization of construction and mining equipment automa-
tion and remote-control technologies, Komatsu has succeeded in verification tests of
an automation technology that achieved the continuous discharge of soil by means of
automatic loading control as well as remote control technology that enabled remotely
switching to multiple units in operation via 5G services provided by NTT DOCOMO, INC.
Collaboration with Proterra of the United States
Start of Proof of Concept Tests for Electrification of Small and Mid-Sized
Hydraulic Excavators
Komatsu has signed a collaboration agreement with Proterra Inc. of the United States,
to receive the supply of Proterra’s lithium battery systems with the aim of electrifying
its small and mid-sized hydraulic excavators (for developing battery-powered con-
struction equipment). Proterra is a leader in commercial vehicle electrification tech-
nologies that delivers battery systems and electrification solutions to help heavy-duty
and commercial vehicle manufacturers around the world electrify their vehicles.
Komatsu plans to advance proof of concept tests starting in 2021 and move forward
with the development of battery systems suited to small and mid-sized hydraulic
excavators, which have higher output requirements, with the goal of commencing
mass production sometime between 2023 and 2024. Based on this agreement,
Komatsu will receive high-performance batteries and peripherals that Proterra has
developed with its state-of-the art technology accumulated over its years of operation
as a manufacturer of electric transit vehicles while also collaborating with this com-
pany as one of its strategic partners of joint proof of concept tests.
Commencement of Joint Development with Honda Motor
Development of Micro Electric Excavators Powered by Swappable Honda
Mobile Power Pack Batteries and Establishment of Battery-Sharing System for
Civil Engineering and Construction Industries
Komatsu has concluded a basic joint-development agreement with Honda Motor Co.,
Ltd., aimed at electrifying its micro excavators (less than one-ton class) with swap-
pable Honda Mobile Power Pack batteries, and establishing a battery-sharing system
that enables mutual use of Honda Mobile Power Packs among different construction
equipment and other equipment for the civil engineering and construction industries.
Under this agreement, the two parties will work to electrify Komatsu’s PC01 micro
excavator by equipping it with Honda Mobile Power Packs and an electrified power unit
(eGX). The PC01 micro excavator is commonly used very close to people, trees, and
flowers for pipe-laying work, gardening, agriculture, livestock, and other applications.
Komatsu is working to launch the PC01 micro electric excavator by the end of FY2021.
* Honda Mobile Power Pack and eGX are registered trademarks of Honda Motor Co., Ltd.
Conceptual image of electric excavator
PC01 micro electric excavator (prototype)
powered by the Honda Mobile Power Pack
Honda Mobile Power Pack
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A Century of Creating the Workplaces of the FutureTop Management’s Views on Komatsu’s Management Issues and Strategies for the Next CenturyEvolution of Business Model for Creating the Workplaces of the FutureResolution of ESG Issues through Growth StrategiesCorporate Profile Evolution of Business Model for Creating the Workplaces of the Future
Special Feature: Komatsu’s Vision for the Workplace of the Future
Pursuit of 2050 Carbon Neutrality
Komatsu’s mid-term management plan, which has FY2021 as its final year, puts forth the targets of reducing CO2
emissions by 50% from the level in 2010 and increasing the rate of renewable energy use to 50%, both of which
are to be achieved by 2030.
Continuing down the path of these goals, Komatsu has decided to pursue carbon neutrality by 2050 to capital-
ize on the future business opportunities that this pursuit will create. Specifically, the prominent trend toward a
carbon-free society itself has been positioned as a business opportunity, and we aim to realize DANTOTSU Value
(a positive cycle of resolving ESG
issues and improving earnings through
the creation of value for customers) by
taking advantage of this opportunity.
CO2 emissions
Mid-Term Management
Plan Targets 2030
50% reduction (from 2010)
Rate of renewable energy usage
50%
2050
Carbon neutral
Virtually Zero
100%
CO2 Emissions Across the Supply Chain for Komatsu Products
Komatsu calculates CO2 emissions across the supply chain for its products on an annual basis in accordance with the guidelines of
Japan’s Ministry of the Environment.
The most significant source of CO2 emissions from across the supply chain was product use (Scope 3, Category 11), which accounted
for roughly 90% of total emissions, while emissions from corporate activities (Scope 1 and Scope 2) only represented 2% of all emissions.
Breakdown of CO2 Emissions Across
the Supply Chain
Komatsu
Scope 1+2
Raw
materials
Scope 3,
Category 1
Product
use
Scope 3,
Category 11
22 million
t-CO2
(FY2020)
Komatsu’s Carbon Neutrality Initiatives
Scope 1:
Scope 2:
Scope 3:
Direct greenhouse gas emissions from business operator (fuel combustion,
industrial processes)
Indirect greenhouse gas emissions from use of electricity, heat, and steam
supplied by other companies
Indirect greenhouse gas emissions not accounted for by Scope 1 or Scope 2
(emissions from other companies related to a business operator’s activities)
Scope 3 is divided into 15 categories including Category 11: Use of sold products.
Category 11 includes the total expected lifetime emissions from all products sold in
the reporting year.
Komatsu’s carbon neutrality initiatives will not be limited to cutting emissions from its bases (Scope 1 and Scope 2) and from the use of its
products (Scope 3, Category 11). Rather, we are broadening the focus of our initiatives to target customer workplaces in their entirety. With this
focus, we will seek to reduce CO2 emissions from society by evolving our Smart Construction solution and otherwise optimizing customer
workplace.
We have also positioned our forestry machinery business, which supports a sustainable forest management cycle of planting, culti-
vating, and harvesting, as well as our remanufacturing (Reman) operations, which entail the restoration and reuse of components, as
cyclical businesses that contribute to reductions in CO2 emissions from society. Accordingly, these businesses will be strengthened as
part of our carbon neutrality initiatives.
Mid-Term Management Plan Target
50% reduction in CO2
emissions*
Safe, highly productive,
smart and clean workplaces of
the future
(%)
100
50
Carbon neutral
Net zero emissions
2010
2030
2050
(Year)
Komatsu’s Initiatives
Pursuit of carbon neutrality at Komatsu production bases
Development of products that reduce environmental impacts
(product improvements)
Provision of solutions that improve customer workplaces
(process improvements)
Reduction of CO2 emissions through forestry
machinery business
Reduction of CO2 emissions through Reman operations
Identify business opportunities associated with carbon neutrality to drive Komatsu’s growth strategies
*Calculation Policies and Assumptions for CO2 Emissions Reduction Target of Mid-Term Management Plan
Mid-Term Target for 2030
50% reduction in CO2
emissions from 2010
Emissions from production
Annual per internal production value emissions calculated using all energy consumed by production bases in the reporting year
Emissions from product use Annual per work volume emissions calculated based on products sold in the reporting year
Calculation Policies and Assumptions
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Pursuit of 2050 Carbon Neutrality
Scope 1
Scope 2
Carbon Neutrality at
Komatsu Bases
01After achieving a 50% reduction in CO2 emissions from 2010 in 2030, we will work to achieve net zero CO2 emis-
sions (carbon neutrality) from our production activities by 2050. In addition, we will deploy the relevant technologies
at material suppliers and other partners to help them also achieve carbon neutrality in their operations.
In implementing its policies for carbon neutrality initiatives at production bases, Komatsu will prioritize energy
conservation initiatives for reducing energy consumption through production technology innovation, then energy
generation initiatives for producing renewable energy in-house, and lastly, purchases of renewable energy.
1
Energy
Conservation
2
Energy
Generation
• Reduction of Energy Consumption through Exhaustive
Productivity and Efficiency Improvements
We will exhaustively reform and improve the efficiency of energy-
intensive processes, such as casting, forging, and heat treatment
processes.
• Upgrades to High-Efficiency Next-Generation Structures
Whenever an aged structure built more than 50 years ago is replaced
in the future, Komatsu will replace it with a zero emissions structure
that uses sustainable energy.
• Introduction of Cutting-Edge Renewable Energy Facilities
(Solar Power, Biomass Power, and Others)
Komatsu will embrace cutting-edge renewable energy facilities
through means such as using lightweight, high-efficiency solar panels
when installing solar power generation facilities to greatly increase
per-area efficiency and generation capacity.
• Effective Utilization of Generated Energy through High-Efficiency
Storage Batteries
The output of solar power and other renewable energy systems can
vary greatly as a result of weather. For this reason, storage batteries
are imperative to the reliable use of such systems. Komatsu is actively
employing the latest storage battery technologies to ensure that it can
utilize energy generation systems to the greatest extent possible.
3
Purchase of
Green Power, LNG
Gas, and Other
Carbon Credits
• Purchase of Green Power, LNG Gas, and Other Carbon Credits
CO2 emissions that cannot be curbed through energy conservation
and energy generation will be offset through the purchase of certified
green power or carbon credits.
Rendering of next-generation melting
furnace using superinsulation
New Komatsu Forest AB factory with roof covered
in solar panels (scheduled to be completed in
August 2021 in Umeå, Sweden)
Biomass boiler at Ibaraki Plant
2050 Carbon Neutrality
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A Century of Creating the Workplaces of the FutureTop Management’s Views on Komatsu’s Management Issues and Strategies for the Next CenturyEvolution of Business Model for Creating the Workplaces of the FutureResolution of ESG Issues through Growth StrategiesCorporate Profile
Evolution of Business Model for Creating the Workplaces of the Future
Special Feature: Komatsu’s Vision for the Workplace of the Future
Pursuit of 2050 Carbon Neutrality
Scope 3
Carbon Neutrality from
Product Use
02
1
Two-Pronged Approach of Improvements in Products and Processes
Komatsu is adopting a two-pronged approach toward reducing the amounts of CO2 emitted during the use of its products. The
first prong is improvements to products. Initiatives in this regard will include increasing the work efficiency of equipment,
pursuing steadfast improvements in fuel efficiency, and transitioning from diesel and other internal combustion engines
to cleaner power sources, including hybrid and electric engines and fuel cells. The second prong is improvements to pro-
cesses. Specifically, we look to lower CO2 emissions by optimizing customers’ workplace operations and processes in
order to reduce the amount of equipment needed along with the operating times of this equipment.
Komatsu seeks to contribute to carbon neutrality, at both construction and mining workplaces, through a combination of
efforts to reduce CO2 emissions by means of highly efficient equipment and measures for improving workplace
efficiency via smart plans, instructions, and management.
Transition from Carbon Neutral
to Carbon Negative
Smart plans, instructions, and
management for all workplace
processes
• Higher environmental performance and productivity
(products)
• Optimization of operations across workplaces
(processes)
Steadfast fuel efficiency
improvements
Hybrid / Energy recovery
systems
Smart Construction use rate
Smart Construction
Hybrid
Energy Efficiency
Equipment
Low-Emissions Equipment
Level 5
Optimization of
Processes
Level 4
Automation of
Process Planning
Level 3
3-Dimensional
Process Planning
Level 2
3-Dimensional
Topographical Map
Level 1
3-Dimensional
Design Data
P
r
o
c
e
s
s
e
s
(
I
m
p
r
o
v
e
m
e
n
t
o
f
E
f
f
i
c
e
n
c
y
t
h
r
o
u
g
h
o
u
t
A
i
l
l
l
W
o
r
k
p
a
c
e
P
r
o
c
e
s
s
e
s
)
Products (Improvement of Equipment Efficiency / Reduction of CO2 Emissions)
Conventional Processes
Level 1
Internal
Combustion
Level 2
Energy Recovery
Level 3
Micro-Mix
Hydrogen
Combustion
Energy Recovery
Level 4
Full Electric
Plug-In/Battery
Level 5
Fuel Cells
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Pursuit of 2050 Carbon Neutrality
Scope 3
2
Development of Products That Reduce Environmental Impacts
(Product Improvements)
The workplace conditions under which construction and mining equipment developed and produced by Komatsu is used can
vary based on model and output. Accordingly, we are incorporating cutting-edge technologies to eliminate CO2 emissions from
products by model and by output class. At the same time, we are sharing our roadmap for carbon neutrality with external devel-
opment partners and customers while making steady progress based on this map.
■ Hydrogen fuel, biofuel,
e-fuel internal combustion
■ Fuel cells
■ Electric (battery/plug-in)
■ Hybrid
■ Diesel internal combustion
Halved CO2
emissions in 2030
(50% reduction in CO2
emissions from 2010)
Surface mining
On-site generation and hydrogen fuel
Underground mining
Protection of underground miners’ health
Extent of reduction from 2010
Urban civil engineering
Use of urban electricity infrastructure
Reductions from product
improvements in 2050
Electrified equipment for reducing environmental impacts
General civil engineering
Reductions from process
improvements in 2050
Carbon neutrality in 2050
(100% reduction in CO2 emissions from 2010)
2020
2025
2030
2035
2040
2045
2050
Voice
Komatsu will create the safe, highly productive, smart and clean workplaces of the future to contribute to the
realization of a carbon-neutral society.
Komatsu has declared its goal of achieving carbon neutrality by 2050 along with its commitment of halving the CO2
emissions from product operation by 2030. In the past, we have achieved massive success in improving the fuel
efficiency of our products by developing and producing major components in-house and combining these compo-
nents in an optimal manner. We also launched the world’s first hybrid hydraulic excavator for sale in 2008. We will continue to
pursue such improvements to product fuel efficiency in the future. However, we also realize that achieving carbon neutrality will
require us to go further to adopt new drive sources. Construction and mining equipment is used for a variety of applications and
under a wide range of conditions, meaning that we need to select a power source that is ideal for each piece of equipment in
order to meet customer expectations. We are currently ramping up development of products that use drive sources that do not
emit CO2, like batteries and fuel cells. In this regard, we began offering rentals of the PC30E-5 electric mini excavator in Japan in
April 2020. We have also announced plans for joint development of micro and mid-sized hydraulic excavators together with
external partners, and we are committed to developing various models through mutually beneficial win-win relationships
together with highly capable partners going forward. Komatsu is also examining the possibility of utilizing e-fuel and
other new fuels that are compatible with conventional internal combustion engines. Another area being examined is
hydrogen engines that use hydrogen as fuel. Meanwhile, we established the Electrified Equipment Development
Center in April 2020. This center is playing a central role in efforts to develop electrified equipment.
In addition, we are evolving solutions to improve efficiency at customer workplaces and consequently reduce
CO2 emissions. For example, we provide solutions that utilize digital technologies to create a digital twin to be used
for tracking workplace conditions and thereby optimizing workplace procedures. Moreover, we will apply automated
operation, remote operation, and other sophisticated digital technologies to develop procedures that are more
efficient than conventional procedures. These new procedures will be utilized to reduce the amount of personnel
and equipment needed at workplaces while also shortening construction periods in order to achieve massive
decreases in workplace CO2 emissions. In this manner, Komatsu is evolving products and solutions to create safe,
highly-productive, smart and clean workplaces of the future in order to contribute to the realization of a
carbon-neutral society.
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Seiichi Fuchita
Senior Executive Officer
President, Development Division
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A Century of Creating the Workplaces of the FutureTop Management’s Views on Komatsu’s Management Issues and Strategies for the Next CenturyEvolution of Business Model for Creating the Workplaces of the FutureResolution of ESG Issues through Growth StrategiesCorporate Profile
Evolution of Business Model for Creating the Workplaces of the Future
Special Feature: Komatsu’s Vision for the Workplace of the Future
Pursuit of 2050 Carbon Neutrality
3
Provision of Solutions That Improve Customer Workplaces
(Process Improvements)
Smart Construction is a solution that contributes to the optimal deployment of construction equipment, dump trucks for trans-
porting dirt and materials, and all other equipment. This solution can be applied to Komatsu construction equipment as well as to
that made by other companies. Optimizing all processes throughout a workplace makes it possible to reduce the amount
of equipment needed, cut back on operating and idling time, and lower workloads, thereby contributing to reductions in
fuel consumption and consequently CO2 emissions.
Web
Smart Construction promotional website (Japanese only):
https://smartconstruction.komatsu/
The “Smart Construction Digital Transformation” solution introduced in April 2020 expanded upon the partial digitization
of construction processes achieved by the previous version of Smart Construction (“vertical digitization”) by allowing for
digitization of all processes (“horizontal digitization”). This solution thus enables worksite operations to be optimized by
synchronizing the actual workplace with its digital twin, thereby realizing drastic improvement in the safety, productivity,
and environmental performance of the entire worksite.
Web
Please refer to the following video for more information on the “Smart Construction Digital Transformation”
solution.
https://www.youtube.com/watch?v=S2me-S4G0PE&t=312s
Customer Construction Process
Surveying
Planning
Construction
Inspection
Traditional
Analog Process
Digital
Transformation
(“DX”) Process
“Vertical digitization”: Digitization of individual construction processes (previous Smart Construction)
Drone 3D measurement /
Visualization
Construction simulation / Digital
task preparation
3D construction / Management with
ICT-intensive equipment and apps
Drone 3D finished landform
inspection
l
S
o
u
t
i
o
n
“Horizontal digitization”: Digitization and connection of all processes to optimize entire construction process—the “digital transformation of construction”
(“Smart Construction Digital Transformation”)
In April 2021, Komatsu established EARTHBRAIN Ltd., a joint venture company, together
with NTT DOCOMO, INC., Sony Semiconductor Solutions Corporation, and Nomura
Research Institute, Ltd. EARTHBRAIN will be tasked with furthering the evolution of Smart
Construction while also deploying this solution overseas. In addition, EARTHBRAIN will combine the insight, expertise,
and technologies of its four owners through means such as providing services that impact all equipment and vehicles at
construction worksites to create a next-generation Smart Construction solution that will accelerate the digital transfor-
mation of construction workplaces.
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Pursuit of 2050 Carbon Neutrality
03
Timber is a resource that is incredibly important for supporting
people’s lives and industry. The forest resources from which timber is
harvested have been maintained through a sustainable cycle of
planting, cultivating, and harvesting by human hands.
At the same time, trees absorb CO2 from the atmosphere as part of
their growth process, and it has been shown that younger, more rapidly
growing trees absorb CO2 at higher rates than older trees. For this
reason, harvesting trees that have grown to a certain extent and replac-
ing them with new trees is a process with the potential to limit global
warming. By supporting forest management cycles as a cyclical busi-
ness, Komatsu aims to help mitigate global warming while contributing
to the realization of a carbon-neutral society.
CO2 Emissions Reduction from
Forestry Machinery Business
Introduction of New Tree
Planting Products
Improvement in Productivity and
Safety in Harvesting and Extracting
Planting
Harvesting
Planting
育
林
Sustainable
Forestry
Harvesting
Harvesting
Cultivating
Cultivating
PC130F harvester
(forest machine
based on hydraulic
excavators)
D61EM-23M0
automated tree
planter
Komatsu is working to mechanize forestry operation processing,
including planting, cultivating, and harvesting trees, to contribute to
Land preparation
D85EX subsoiling machine
Extracting
Forwarder 895
Forest forwarder usable on slopes
sustainable forestry. In the realm of planting, we have developed
subsoiling machines and automated tree planters based on our
bulldozers, and we are currently supplying these machines to the Brazilian
market. These machines have transformed the process of planting trees,
which had previously been performed by people under the heat of the
Web
Please refer to the following video for an illustration of the
D61EM automated tree planter in operation, which was
introduced into the Brazilian market:
https://www.youtube.com/watch?v=00FNm4-gqwo
blazing sun, making it possible to plant 900 trees in one hour with exceptional speed and precision.
Komatsu is also promoting smart forestry, which entails digitally linking all forestry processes. In our smart forestry approach, we look to
contribute to safe and highly productive forestry by supplying solutions that, for example, use drones to measure forest density and tree height and
thereby make it possible to perform forestry procedures merely by inputting into machines such information as the lengths of timber and the type
of trees required by the market.
Pursuit of 2050 Carbon Neutrality
04Komatsu Group is engaged in global remanufacturing (“Reman”) operations in
which it restores the engine and transmission components collected during
regular replacements to the same status as if they were new so that these
CO2 Reductions through
Reman Operations
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33
33
on the principles of the 3Rs (reduce, reuse, and recycle) as they help cut back on waste by restoring and reusing components and thereby
contributing to reductions in CO2 emissions.
products can once again be sold on the market. Restoring these products
entails a process with various steps including disassembly, washing, parts
replacement, reassembly, painting, and shipping inspections.
Benefits for Customers
• Guaranteed quality and performance on a level with new products
• Lower prices than new products
• Shorter equipment downtimes through supply of appropriately
stocked Reman components
• Resource conservation and waste reduction through component
reuse and recycling
Reman operations are made possible by Komatsu’s in-house development
and production of key components. Moreover, these operations are based
A Century of Creating the Workplaces of the FutureTop Management’s Views on Komatsu’s Management Issues and Strategies for the Next CenturyEvolution of Business Model for Creating the Workplaces of the FutureResolution of ESG Issues through Growth StrategiesCorporate Profile
Evolution of Business Model for Creating the Workplaces of the Future
Mid-Term Management Plan (FY2019–FY2021)
DANTOTSU Value
FORWARD Together for Sustainable Growth
Komatsu’s External Environment
Today, protectionism is growing around the world, and multipolarity is becoming evident. We are also witnessing growing concerns
over climate change. As the external environment is changing dynamically, in the construction, mining, and utility equipment busi-
ness, we assume gradual growth of the demand in the medium to long term, but the volatility will remain high in the short term. In
the industrial machinery and others business, we anticipate a structural change in demand in the automobile manufacturing indus-
try, mainly resulting from ongoing progress toward electric vehicles. In addition, we anticipate assured growth in demand in the
semiconductor manufacturing industry over the medium to long term, while a temporary adjustment phase is also expected.
Achieving sustainable growth in this environment will require growth strategies that are not affected by demand fluctuations.
Changes in the External Environment and of ESG Issues
Politics & economy
• Multipolarization of the world
• Emergence of protectionism
• Growth of emerging economies
Technologies
• Further spread of IoT, AI,
and big data
• The progress of electric and
autonomous vehicles
Environment & energy
• Climate change
• Growing demand for energy,
foods and water
• Decarbonization &
renewable energy
Society & values
• Acceleration of diversity in
advanced countries
• A decline of working-age
population
• Achievement of a recycling-
oriented society by accelerating
the pace of sharing
• Growing pursuit and needs for
safety and comfort
Expectations of achieving a sustainable society
Our Tasks in the Growth
Strategies
1. To solve ESG issues through the growth strategies of
our core business
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DANTOTSU Value
FORWARD Together for Sustainable Growth
Demand for Construction and Mining Equipment
Period of the previous plan
Period of the mid-term management plan
• Growth strategies based on innovation
• Growth strategies of existing
businesses
• Structural reforms designed to rein-
force the business foundation
• Value creation by means of innovation
• Growth strategies based on business
reforms
• Structural reforms for growth
Growth above the industry’s
average by focusing investment
in growth areas
d
n
a
m
e
D
/
s
e
a
S
l
Demand recovery for mining equipment
and in emerging economies
Sustainable
growth
We assumed demand recovery would start in
FY2019 in the previous plan.
(Actually it started in FY2017.)
We assume gradual growth in the mid to
long ranges, but volatility will remain high
in the short range.
Assumed range of
demand change
FY2016
FY2017
FY2018
FY2019
FY2020
FY2021
FY2022 ~
Construction, Mining, and Utility Equipment Business Sales (to Outside Customers) by Region
2,267.3
2,466.6
(Billions of yen)
3,000
2,500
2,000
1,500
1,000
500
0
1,566.3
FY2016
FY2017
FY2018
Africa
Middle East
Oceania
Asia
China
CIS
Latin America
Europe
North America
Japan
Strategic
Markets
54%
Traditional
Markets
46%
Performance of the mid-term
management plan
2,205.9
1,961.2
FY2019
FY2020
Expectations of achieving a sustainable society
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2. To promote sustainable growth based on our profit structure which is free
of changes in the external environment and market demand
A Century of Creating the Workplaces of the FutureTop Management’s Views on Komatsu’s Management Issues and Strategies for the Next CenturyEvolution of Business Model for Creating the Workplaces of the FutureResolution of ESG Issues through Growth StrategiesCorporate Profile
Evolution of Business Model for Creating the Workplaces of the Future
Mid-Term Management Plan (FY2019–FY2021)
Overview of the Mid-Term Management Plan
The mid-term management plan sets forth the future vision Komatsu should aspire to and hope to accomplish as it approaches
and moves beyond the 100th anniversary of its founding in 2021. As part of this vision, we seek to become a company that can
help realize the safe, highly productive, smart, and clean workplaces of the future together with customers while generating a posi-
tive cycle of resolving ESG issues through the creation of value for customers and improving earnings.
Management Principle
Make commitment to Quality and Reliability and maximize corporate value (the total sum of trust from society and all stakeholders)
2021
100th
anniversary
and beyond
Previous Plan
(FY2016–FY2018)
• Growth strategies based on
innovation
• Growth strategies of existing
businesses
• Structural reforms designed to
reinforce the business
foundation
Integration of KMC
(FY2017)
Mid-Term
Management Plan
(FY2019–FY2021)
Three Pillars of Growth
Strategies
1. Value creation by means
of innovation
2. Growth strategies based
on business reforms
3. Structural reforms
for growth
Future Vision
ESG Solutions
Positive cycle = Sustainable growth
Workplaces of
the future: Safe,
highly productive,
smart and clean
Positive cycle = Sustainable growth
Improvement of earnings
1
2
3
Value creation
by means of
innovation
• Optimization platform and solutions business strategies
Smart Construction, Autonomous Haulage System (AHS), and platforms
(LANDLOG and IntelliMine)
• Automation, autonomous operation, electrification and remote-controlling of
construction, mining and utility (compact) equipment
• Smart forestry and agriculture
Growth strategies
based on business
reforms
• KMC integration synergies and business reinforcement
• Value chain reforms and redefinition of the aftermarket business
Preventive maintenance by applying IoT and AI, and Lifecycle support under serial
number-based management; logistics reforms; and next-generation key components
• Next-generation Komtrax
• Stronger focus on aggregate & cement, forestry, agriculture and other segments
• Efforts for “DANTOTSU No. 1 in Asia” and in the growing markets of India and Africa
• Reforms of the industrial machinery business (Expansion of synergy with the construction
equipment business and growth by capitalizing on core technologies)
Structural
reforms for
growth
• Business reforms by means of ICT and IoT
• Structural reforms of development operations Model based development
Open innovation
• Connected plants with Zero impact on environment and workers
• Global human resource development
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BackcastingGrowth strategies and management targets by backcasting the roadmap to our future vision Management Targets of the Mid-Term Management Plan and Related Performance
Management Target
FY2019 (First year of the plan)
FY2020
Indicator
Performance
Performance
Growth
• Growth rate above the industry’s average
Sales growth rate
▲10.3%
▲10.4%
Profitability
• An industry’s top-level operating income ratio
Efficiency
• 10%-level ROE
Financial
position
Shareholder
return
• Keep a fair balance between investment for growth and shareholder
return (including stock buybacks), while placing main priority on
investment
• Set the goal of a consolidated payout ratio of 40% or higher
• Reduction of environmental impact
CO2 emissions: Decrease by 50% in 2030
from 2010
Renewable energy use: Increase to 50% of
ESG
total energy use in 2030
Reduction of CO2
emissions from
product use
Reduction of CO2
emissions from
production
Rate of renewable
energy usage
Evaluation by external
organizations
• ROA: 1.5%–2.0%
Selected for DJSI
(World & Asia Pacific)
CDP A-List
(Climate Changes and Water Risk)
• 5.0 or under for net debt-to-equity ratio
Retail finance
business
Operating
income ratio
ROE
Net debt-to-
equity ratio
Consolidated
payout ratio
Reduction of
environmental
impact
Evaluation by
external
organizations
ROA
Net debt-to-
equity ratio
10.3%
8.6%
0.43
7.6%
5.8%
0.35
57.7%
48.9%
△14%
△14%
△32%
△33%
11%
13%
Selected for DJSI Selected for DJSI
CDP Climate Change: A
CDP Climate Change: A
CDP Water Risk: A–
CDP Water Risk: A
1.5%
3.80
1.2%
3.69
Concepts and Stance of the Mid-Term Management Plan
The mid-term management plan defines three pillars of growth strategies: 1) value creation by means of innovation, 2) growth
strategies based on business reforms, and 3) structural reforms for growth. By prioritizing investment on growth areas based on
the three pillars of growth strategies, we will seek to achieve sustainable growth through a positive cycle of improving earnings
and solving ESG issues that is resilient to fluctuations in demand.
Expectations of society and stakeholders
Growth Strategy Aligned with Management Principles
Stakeholders
Communities
Customers
Employees
Distributors
Suppliers
Business partners
Shareholders
Investors
Maximize Corporate Value which is the Total Sum of Trust
Enhance Corporate Brand
Solutions for ESG issues
Sustainable growth
Shared growth based on
growth strategies
ESG Solutions
Positive cycle = Sustainable growth
Three Pillars of Growth
Strategies
1. Value creation by means of
innovation
2. Growth strategies based on
business reforms
3. Structural reforms for growth
Sustainable increase of
Improvement of earnings
earnings
Positive cycle = Sustainable growth
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BackcastingGrowth strategies and management targets by backcasting the roadmap to our future visionA Century of Creating the Workplaces of the FutureTop Management’s Views on Komatsu’s Management Issues and Strategies for the Next CenturyEvolution of Business Model for Creating the Workplaces of the FutureResolution of ESG Issues through Growth StrategiesCorporate Profile Resolution of ESG Issues through Growth Strategies
Komatsu’s CSR Themes and Mid-Term Management Plan KPIs
Komatsu seeks to help resolve ESG issues by promoting the three pillars of growth strategies defined in the new mid-term
management plan. We strive to realize a positive cycle of sustainable growth through improvements of earnings and reso-
lutions to ESG issues. Our initiatives include reducing environmental impacts to combat climate change and supplying
CSR Themes
ESG Solutions through
Three Pillars of Growth
Key Initiatives under Mid-Term Management Plan
FY2019 KPI Performance
FY2020 KPI Performance
FY2021 KPIs
Strategies Relevant SDGs
Enhancing
Quality of Life
—Providing Products
Required by Society—
• Provide products, service and solutions
contributing to sustainable development of
infrastructure, natural resources and circular
environmental protection (remanufacturing
and forestry).
• Improve productivity, efficiency, safety and
environmental impact (lower CO2 emissions
and higher ratio of renewable energy use)
through innovations, such as automation in
the entire value chain.
• Make commitment to DANTOTSU Value which
will realize a better Earth and future by means
of technology and reliability (creation and
maximization of customer value).
Reduction of CO2 emissions (in comparison to FY2010)
• Reduction of CO2 emissions from product use (fuel-efficiency equipment, hybrid hydraulic
excavator, rate of Smart Construction use, enhancement of ICT-intensive construction, mine
automation, and underground mining equipment)
• Reduction of CO2 emissions from production (plants with zero impact on environment and
workers)
Plants with zero impact on environment and workers
• Rate of renewable energy use (including purchase of renewable energy)
• Work environment burden coefficient (particle matter density)
• Water consumption
Value chain reforms and redefinition of the aftermarket business
• Spare parts sales
• Reman component lifespan (compared to new components)
Actual value: Average operating time from the nth to the n+1st overhaul order
Assurance of mine operation safety and productivity
• AHS units’ population (promotion of mining platform business)
DANTOTSU Product, DANTOTSU Service, and DANTOTSU Solution
• ICT-intensive equipment introduced (United States, Europe, and Australia)
• Sites adopting Smart Construction
Automation, autonomous operation, electrification, and remote-controlling of equipment
14% reduction
33% reduction
11%
10.7% reduction
49.4% reduction
3% increase
221 units
1,361 units
2,440
1. Automation of construction equipment
Verification tests conducted on user sites
In-house verification tests
2. Automation, autonomous operation, and remote operation of mining equipment
3. Automation of utility equipment
• Enhancement of mining equipment and hard rock mining businesses
Agricultural solutions and smart forestry
• Creation of construction equipment demand in agricultural field
• Smart forestry projects
IoT and ICT work reforms
• Sales in Kom-mics platform business (visualization of production equipment operation)
Development of a diverse workforce with a high level of productivity and technical skills
• Enhancing employee engagement
• Work process reforms through expansion of diverse and flexible workstyles
Developing
People
• Develop a diverse workforce with a high level
of productivity and technical skills.
• Promotion of The Komatsu Way (global dissemination of The Komatsu Way)
participants)
participants)
• Number of participants: 1,461 in Japan, 307 overseas
• Number of participants: 1,527 in Japan, 0 overseas
Training hours and number of participants (Disclosure of
results)
Strengthening and development of diverse talent with a global perspective to help achieve
sustainable workplaces
• Strengthen and develop diverse talent with a
• Revision of role of Japan in global management
global perspective to help achieve
sustainable workplaces.
• Develop talent with cross-value chain
capabilities.
• Foundations for global measures (systems, frameworks)
• Empowerment of female employees ((1) non-consolidated ratio of female employees,
(2) non-consolidated ratio of female managers, (3) consolidated ratio of female managers (Japan))
• Rate of employment of people with disabilities (comply with requirements in Japan)
2.58% (non-consolidated)
2.82% (non-consolidated)
Above 2.3% (legally mandated rate)
• Support for regional human resource development for job creation (regional human resource
development with Cummins Inc.)
Development of talent with cross-value chain capabilities
• Cultivation of Smart Construction consultants (capable of proposing solutions using ICT to
improve productivity and safety throughout construction workplaces)
Resolutions to social issues through collaboration with stakeholders
• Promotion of industry–government–academia collaboration as well as of collaboration with
Examination of cutting-edge tools through activities with
customers
domestic customers and regional dissemination
basis
Promotion of Brand Management and activities creating
value for customers
• Offer resolutions for social issues through
collaboration with stakeholders.
• Shareholders and individual investors (shareholder meetings, shareholder factory tours, individual
investor meetings)
Growing with
Society
• Act as a responsible corporate citizen ensur-
ing corporate governance, compliance, and
human rights.
• Institutional investors (ESG meetings)
11 (ESG-related meetings)
• Participation in conferences: 1 (meetings held with 18
Number of meetings held (Disclosure of results)
• Communities (business site fairs)
All factory fairs canceled due to COVID-19 pandemic
One fair held at each of nine factories per year
• Employees (meetings)
Action as a responsible corporate citizen addressing corporate governance, compliance, and human rights
• Occupational health and safety, support for establishing environmental and safety systems at
suppliers, response to Japan’s Corporate Governance Code (corporate governance reports),
evaluations of effectiveness of Board of Directors, internal control, and internal audits
34 (30 in Japan, 4 overseas)
29 in Japan (canceled overseas due to COVID-19 pandemic)
Number of meetings held (Disclosure of results)
Establishment of Human Rights Policy, disclosure in
Revised Komatsu Code of Worldwide Business Conduct
Ongoing improvements made in reflection of relevant laws
integrated report
Human rights e-learning programs, etc.
and regulations and social expectations
Business fairs at nine factories (Awazu, Osaka, Ibaraki,
Kanazawa, Tochigi, Oyama, Koriyama, Shonan, and Himi);
canceled only at Shonan Plant due to impacts of Typhoon
Hagibis
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39
26,866 workhours (134% of new components)
19,106 workhours (95% of new components)
20,000 workhours (100% of new components)
14% reduction
16% reduction (in comparison to FY2010)
33% reduction
40% reduction (in comparison to FY2010)
13%
24% reduction
52% reduction
8% decrease
352 units
1,288 units
3,348
15%
30% reduction (in comparison to FY2018)
55% reduction (in comparison to FY2010)
11% increase
380 units (aggregate)
1,590 units (per year)
4,850 (per year)
Test introduction of hydraulic excavators for automated
loading
Entry into mining bulldozer market (level 4 automation)
Development of technology for automated forklifts
Preparations advanced to launch mining bulldozer with
Domestic pretest of bulldozer with level 3 automation,
level 2 automation
preparation for proof of concept test in Australia
Development of peripheral safety technologies for
Entry into retrofit market for installing peripheral safety
supporting automation
functions in preparation for automation
Advancement of development projects for expanding
product series
Expansion of product series (drills, LHD) Four models
Expansion of product series
Japan: Commencement of verification tests at five
Japan: Development and market evaluation of agricultural
agriculture business operators
ATT
Indonesia: Started mass production and sales of D31PLL
Indonesia: Confirmation of feasibility of D21 agricultural
agricultural bulldozer
bulldozer for direct rice planting applications
10
865 units
19
1,447 units
Japan: Expand lineup of agricultural loaders
Indonesia: Increase number of users of agricultural
techniques employing agricultural bulldozers
50
1,900 units (including for internal use)
Scheduled for FY2020
Preparation for survey in FY2020, global survey in April 2021
Improvement of global surveys and indexes
(1) 1,950 workhours per person/year
(1) 1,920 workhours per person/year
Total workhours of less than 2,100; introduction of
(2) Commencement of trial in August 2019
(2) Revision of telework system in August 2020
telework system (Japan)
• Training hours: 31,625 hours (aggregate hours for all
• Training hours: 33,188 hours (aggregate hours for all
Human resource system revisions started in Japan
benefit systems in April 2021
activities; globalization of organizations on by-function
• Revision of domestic retirement, wage, and retirement
Shifting of human resources to projects and improvement
Preparations advanced for introduction
Commencement of domestic data linkage
• Introduction of elective retirement and R&D staff systems
basis
Introduction
(1) 12.3%, (2) 7.2%, and (3) 4.5%
(1) 12.3%, (2) 7.7%, and (3) 4.9%
(1) 12.5%, (2) 10.0%, and (3) 5.0%
• Human resource development program launched in Chile
• Ongoing support provided in Peru, South Africa, and
Australia
• Participants’ success in finding employment tracked
• Ongoing support in Chile, South Africa, and Australia
• Establishment of scholarship program for students in Chile
Chile, Australia, South Africa, others
and Peru as part of COVID-19 relief program
396
626
430 (aggregate)
• Shareholder meetings: 2 times
• Shareholder factory tours: 10 times
• Individual investor meetings: 7 times
• Certain factory tours and meetings canceled due to
YouTube account)
impacts of global COVID-19 pandemic
• Individual investor meetings: 4 times (held online)
pandemic, factory tour videos shared on official Komatsu
Number of meetings held (Disclosure of results)
• Posting of past activity documents on Group portal
• Shared information on activities in 14 regions on rotational
• Continuation of activities by headquarters team targeting
three customers (two civil engineering, one aggregate)
• Shareholder meetings: 1 time (held online)
• Shareholder factory tours: 0 (canceled due to COVID-19
• ESG-related meetings: 4
investors)
CSR Themes
ESG Solutions through
Three Pillars of Growth
Key Initiatives under Mid-Term Management Plan
FY2019 KPI Performance
FY2020 KPI Performance
FY2021 KPIs
Strategies Relevant SDGs
high-quality, high-performance products, services, and solutions ensuring safety. KPIs have been set to guide these
initiatives for solving ESG issues through our core business.
14% reduction
33% reduction
11%
10.7% reduction
49.4% reduction
3% increase
14% reduction
16% reduction (in comparison to FY2010)
33% reduction
40% reduction (in comparison to FY2010)
13%
24% reduction
52% reduction
8% decrease
15%
30% reduction (in comparison to FY2018)
55% reduction (in comparison to FY2010)
11% increase
Actual value: Average operating time from the nth to the n+1st overhaul order
26,866 workhours (134% of new components)
19,106 workhours (95% of new components)
20,000 workhours (100% of new components)
221 units
1,361 units
2,440
352 units
1,288 units
3,348
380 units (aggregate)
1,590 units (per year)
4,850 (per year)
Reduction of CO2 emissions (in comparison to FY2010)
• Reduction of CO2 emissions from product use (fuel-efficiency equipment, hybrid hydraulic
excavator, rate of Smart Construction use, enhancement of ICT-intensive construction, mine
automation, and underground mining equipment)
• Reduction of CO2 emissions from production (plants with zero impact on environment and
workers)
Plants with zero impact on environment and workers
• Rate of renewable energy use (including purchase of renewable energy)
• Provide products, service and solutions
• Work environment burden coefficient (particle matter density)
contributing to sustainable development of
infrastructure, natural resources and circular
• Water consumption
• Spare parts sales
Value chain reforms and redefinition of the aftermarket business
environmental protection (remanufacturing
• Reman component lifespan (compared to new components)
and forestry).
Enhancing
Quality of Life
—Providing Products
Required by Society—
• Improve productivity, efficiency, safety and
environmental impact (lower CO2 emissions
Assurance of mine operation safety and productivity
• AHS units’ population (promotion of mining platform business)
DANTOTSU Product, DANTOTSU Service, and DANTOTSU Solution
• ICT-intensive equipment introduced (United States, Europe, and Australia)
and higher ratio of renewable energy use)
• Sites adopting Smart Construction
through innovations, such as automation in
Automation, autonomous operation, electrification, and remote-controlling of equipment
the entire value chain.
1. Automation of construction equipment
Verification tests conducted on user sites
In-house verification tests
• Make commitment to DANTOTSU Value which
will realize a better Earth and future by means
3. Automation of utility equipment
of technology and reliability (creation and
maximization of customer value).
• Enhancement of mining equipment and hard rock mining businesses
Agricultural solutions and smart forestry
2. Automation, autonomous operation, and remote operation of mining equipment
Preparations advanced to launch mining bulldozer with
level 2 automation
Development of peripheral safety technologies for
supporting automation
Advancement of development projects for expanding
product series
Domestic pretest of bulldozer with level 3 automation,
preparation for proof of concept test in Australia
Entry into retrofit market for installing peripheral safety
functions in preparation for automation
Test introduction of hydraulic excavators for automated
loading
Entry into mining bulldozer market (level 4 automation)
Development of technology for automated forklifts
Expansion of product series (drills, LHD) Four models
Expansion of product series
• Creation of construction equipment demand in agricultural field
• Smart forestry projects
IoT and ICT work reforms
• Sales in Kom-mics platform business (visualization of production equipment operation)
Development of a diverse workforce with a high level of productivity and technical skills
• Enhancing employee engagement
• Work process reforms through expansion of diverse and flexible workstyles
Japan: Commencement of verification tests at five
agriculture business operators
Indonesia: Started mass production and sales of D31PLL
agricultural bulldozer
Japan: Development and market evaluation of agricultural
ATT
Indonesia: Confirmation of feasibility of D21 agricultural
bulldozer for direct rice planting applications
10
865 units
19
1,447 units
Scheduled for FY2020
Preparation for survey in FY2020, global survey in April 2021
(1) 1,950 workhours per person/year
(2) Commencement of trial in August 2019
• Training hours: 31,625 hours (aggregate hours for all
(1) 1,920 workhours per person/year
(2) Revision of telework system in August 2020
• Training hours: 33,188 hours (aggregate hours for all
• Develop a diverse workforce with a high level
of productivity and technical skills.
Strengthening and development of diverse talent with a global perspective to help achieve
sustainable workplaces
• Strengthen and develop diverse talent with a
• Revision of role of Japan in global management
• Promotion of The Komatsu Way (global dissemination of The Komatsu Way)
participants)
participants)
• Number of participants: 1,461 in Japan, 307 overseas
• Number of participants: 1,527 in Japan, 0 overseas
• Foundations for global measures (systems, frameworks)
Preparations advanced for introduction
Commencement of domestic data linkage
Human resource system revisions started in Japan
benefit systems in April 2021
• Revision of domestic retirement, wage, and retirement
• Introduction of elective retirement and R&D staff systems
Japan: Expand lineup of agricultural loaders
Indonesia: Increase number of users of agricultural
techniques employing agricultural bulldozers
50
1,900 units (including for internal use)
Improvement of global surveys and indexes
Total workhours of less than 2,100; introduction of
telework system (Japan)
Training hours and number of participants (Disclosure of
results)
Shifting of human resources to projects and improvement
activities; globalization of organizations on by-function
basis
Introduction
• Empowerment of female employees ((1) non-consolidated ratio of female employees,
(2) non-consolidated ratio of female managers, (3) consolidated ratio of female managers (Japan))
• Rate of employment of people with disabilities (comply with requirements in Japan)
• Support for regional human resource development for job creation (regional human resource
development with Cummins Inc.)
Development of talent with cross-value chain capabilities
• Cultivation of Smart Construction consultants (capable of proposing solutions using ICT to
improve productivity and safety throughout construction workplaces)
Resolutions to social issues through collaboration with stakeholders
(1) 12.3%, (2) 7.2%, and (3) 4.5%
(1) 12.3%, (2) 7.7%, and (3) 4.9%
(1) 12.5%, (2) 10.0%, and (3) 5.0%
2.58% (non-consolidated)
• Human resource development program launched in Chile
• Ongoing support provided in Peru, South Africa, and
Australia
• Participants’ success in finding employment tracked
2.82% (non-consolidated)
Above 2.3% (legally mandated rate)
• Ongoing support in Chile, South Africa, and Australia
• Establishment of scholarship program for students in Chile
and Peru as part of COVID-19 relief program
Chile, Australia, South Africa, others
396
626
430 (aggregate)
Developing
People
global perspective to help achieve
sustainable workplaces.
• Develop talent with cross-value chain
capabilities.
• Promotion of industry–government–academia collaboration as well as of collaboration with
customers
Examination of cutting-edge tools through activities with
domestic customers and regional dissemination
• Offer resolutions for social issues through
collaboration with stakeholders.
investor meetings)
• Shareholders and individual investors (shareholder meetings, shareholder factory tours, individual
Growing with
Society
• Act as a responsible corporate citizen ensur-
• Institutional investors (ESG meetings)
ing corporate governance, compliance, and
human rights.
• Communities (business site fairs)
• Employees (meetings)
• Shareholder meetings: 2 times
• Shareholder factory tours: 10 times
• Individual investor meetings: 7 times
• Certain factory tours and meetings canceled due to
impacts of global COVID-19 pandemic
11 (ESG-related meetings)
Business fairs at nine factories (Awazu, Osaka, Ibaraki,
Kanazawa, Tochigi, Oyama, Koriyama, Shonan, and Himi);
canceled only at Shonan Plant due to impacts of Typhoon
Hagibis
34 (30 in Japan, 4 overseas)
• Posting of past activity documents on Group portal
• Shared information on activities in 14 regions on rotational
basis
• Continuation of activities by headquarters team targeting
three customers (two civil engineering, one aggregate)
• Shareholder meetings: 1 time (held online)
• Shareholder factory tours: 0 (canceled due to COVID-19
pandemic, factory tour videos shared on official Komatsu
YouTube account)
• Individual investor meetings: 4 times (held online)
• ESG-related meetings: 4
• Participation in conferences: 1 (meetings held with 18
investors)
Promotion of Brand Management and activities creating
value for customers
Number of meetings held (Disclosure of results)
Number of meetings held (Disclosure of results)
All factory fairs canceled due to COVID-19 pandemic
One fair held at each of nine factories per year
29 in Japan (canceled overseas due to COVID-19 pandemic)
Number of meetings held (Disclosure of results)
Action as a responsible corporate citizen addressing corporate governance, compliance, and human rights
• Occupational health and safety, support for establishing environmental and safety systems at
suppliers, response to Japan’s Corporate Governance Code (corporate governance reports),
evaluations of effectiveness of Board of Directors, internal control, and internal audits
Establishment of Human Rights Policy, disclosure in
integrated report
Revised Komatsu Code of Worldwide Business Conduct
Human rights e-learning programs, etc.
Ongoing improvements made in reflection of relevant laws
and regulations and social expectations
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Enhancing Quality of Life—Providing Products Required by Society—
Komatsu announced its endorsement of the TCFD’s recommendations in April 2019. Accordingly, we have been assessing
the risks and opportunities that climate change presents for Komatsu and conducting related scenario analyses. At the
same time, we practice constructive dialogue with stakeholders while advancing initiatives for combating climate change.
Strategies
Risk and Opportunity Identification
A total of 16 climate change-related risks and opportunities
(TCFD). We then assessed internal factors, which impact sales
were identified for Komatsu, primarily in relation to construc-
and earnings, and external factors, which affect projected
tion equipment operations, based on the recommendations of
scenarios. Through this process, the 16 risks and opportuni-
the Task Force on Climate-related Financial Disclosures
ties were grouped based on four major themes.
Risks and Opportunities and Groupings
16 Risks and Opportunities
Four Major Themes
• Coal demand fluctuations
• Changes in reputation among customers and
investors
Changes in
resource demand
• Reduced coal demand
• Increased resource demand related to
electric equipment
• Environmental regulations
• Trend toward electric equipment
• Subsidiaries for renewable energy and energy
conservation projects
• Substitute fuel technologies
• Next-generation technical services (new market)
Transition to
low-carbon
products
• More stringent fuel regulations
• Progress in electrification and next-
generation technologies
• Carbon prices
• Popularization of renewable energy technologies
• Raw material prices
• Energy prices
• Recycling
Manufacturing
costs
• Rising manufacturing costs due to higher
carbon prices*
*CO2 taxation measures for reducing
emissions
• More frequent abnormal weather events
• Increased precipitation amounts and weather
patterns
• Higher average temperatures
• Rising sea levels
Natural disasters
• Increased precipitation amounts and flood
risks due to abnormal weather
• Higher demand in conjunction with
national resilience plans
Business Risks and Opportunities Based on
Climate Change Scenarios
To gauge the potential impacts of climate change-related risks
Sustainable Development Scenario and Stated Policies
Scenario of the International Energy Agency (IEA).
The risks and opportunities pertaining to specific ESG
and opportunities on Komatsu’s business, we performed sce-
themes and Komatsu’s strategies for addressing these risks
nario analyses of the Company’s four major risk and opportu-
and opportunities are described on the following page. Should
nity themes. For these scenario analyses, we defined a 2°C
a scenario targeting more substantial greenhouse gas emis-
scenario and a 4°C scenario based on the Fifth Assessment
sions reductions be issued, Komatsu will be expected to
Report of the Intergovernmental Panel on Climate Change
address stricter regulations and accelerate the development
(Representative Concentration Pathways 2.6 and 8.5) and the
of new technologies in accordance with this scenario.
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41
Changes in Resource Demand
2°C
scenario
4°C
scenario
Strategies
Risks
Opportunities
• Regulation of power generation using fossil fuels
• Massive reductions in coal production volumes under IEA
scenarios
• Rapid transition from fossil fuel-powered equipment to electric
equipment
• Higher demand for copper and other resources necessary for electric
equipment (motors, batteries, fuel cells, etc.)
• Reduced sales to coal-related customers by Komatsu
• Increased sales to copper and other relevant mining-related customers
by Komatsu in conjunction with trend toward electric equipment
• Limited regulation of coal in developing nations
• Coal production volumes in 2030 in line with current levels
• Trend toward electric equipment less pronounced than in 2°C scenario
• Higher demand for copper and other resources necessary for electric
under IEA scenarios
equipment
• Reduced appetite for investment in coal mines
• Rise in investment for streamlining mine operations
Exploration of business opportunities arising from climate change through value creation by means of innovation and
growth strategies based on innovation
• Increased metal resource demand in conjunction with transition to electric equipment—Expansion of underground mining
equipment operations
• Contribution to sustainable forestry—Provision of equipment and systems for streamlining processes spanning from afforestation to logging
• Contribution to rehabilitation of closed mine sites and greenification of deserts—Forest restoration projects at closed mine sites and
forest machine operations
• Transition to circular economies—Expansion of equipment restoration (“Reman”) business
Transition to Low-Carbon Products
Risks
Opportunities
• Rising demand for electric equipment, fuel-efficient equipment,
and biomass fuel-powered equipment
• Higher development and capital investment costs due to
• Higher sales in traditional areas due to success in developing
2°C
scenario
emissions restrictions
• Reduced sales due to inability to cater to customer
electrification demands
• Substantial changes in technology development and
competitive climate including market entry by new
competitors
low-carbon products
• Higher sales due to ability to swiftly respond to change in focus
toward low-carbon products in strategic markets where shift to
low-carbon products was slow
• Growth of equipment restoration (Reman) operations driven by
transition to cyclical economy
• Long-term diminishment of technological edge as customers
• Increased demand for Smart Construction and other solutions
begin leading drive component development and
manufacturing projects
with emissions-reducing benefits
• Increased product reliability due to securing stable supply
sources for high-quality components for storage batteries and
other major components
Komatsu is advancing initiatives aimed at accomplishing its CO2 emissions reduction targets for 2030 while facilitating the
transition to the low-carbon products the world demands.
• Develop electrification systems for construction equipment
• Develop power sources and high-efficiency components compatible with carbon neutral fuels
• Develop high-energy-efficiency equipment
• Deploy Smart Construction and other solutions on a global scale
• Contribute to cyclical businesses through forestry machinery and Reman businesses
Strategies
Please refer to the following pages for information on Komatsu’s efforts to transition to low-carbon products.
• Pages 28–33: Special Feature: Komatsu’s Vision for the Workplace of the Future
• Pages 26, 27, and 43: Examples of low-carbon products
Manufacturing Costs
2°C
scenario
Strategies
Risks
Opportunities
• Taxation of fossil fuels and CO2 emissions
• Transfer of higher product purchase prices to Komatsu
• Rising power fees and energy costs following investment in
power generation facilities with low CO2 emissions
• Increased competitiveness through production technologies that
reduce CO2 emissions
• Mitigation of cost increases by achieving CO2 reduction and renewable energy targets defined in the mid-term
management plan
Web
Please refer to the following website for information on recent CO2 emissions reduction activities:
https://komatsu.disclosure.site/en/themes/149
Natural Disasters
Risks
Opportunities
• Increased frequency of heavy rain and floods due to abnormal
weather
4°C
scenario
• Risks of disaster damages to Komatsu plants at high risk of
flooding
• Component supply delays following damages to suppliers from
disasters
• Increased demand for flood-control works
Strategies
• Institute heavy rain and flood countermeasures across the value chain
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Enhancing Quality of Life—Providing Products Required by Society—
Governance
Komatsu views climate change as an important management issue, and targets for combating climate change have
been incorporated into its business strategies. Discussions regarding climate change are held at meetings of the
Sustainability Promotion Committee and the Risk Management Committee, and these committees make suggestions
to the Strategy Review Committee and report to the Board of Directors, thereby furnishing a system of appropriate
oversight. Meanwhile, the Executive Meeting fulfills the function of managing progress toward targets.
Climate Change-Related Reporting and Deliberation System
Board of Directors
Strategy Review Committee
Executive Meeting
Report
Suggest
• Sustainability Promotion Committee
• Risk Management Committee
Major Discussion Items Related to Climate Change
Name
Chairperson
Major Discussion Items Related to Climate Change
Board of Directors
Chairman of the Board
and Representative
Director
Strategy Review Committee
President
Executive Meeting
President
• Report from Earth Environment Committee
• Reports from research, development, and product planning divisions and the Chief
Technology Officer
• Reports from production and procurement division
• Mid-term management plan progress report
• Growth strategies for major plants (including climate change-related matters)
• Report from Environmental Affairs Department
• Progress in regard to product development and production system
• Climate change lectures by external specialists
Name
Chairperson
Major Discussion Items Related to Climate Change
Sustainability Promotion
Committee
President
Risk Management Committee
Executive officer
supervising general
affairs
• Initiatives for addressing ESG issues
• Deliberations and reports regarding important environmental matters and key performance
indicators (KPIs)
• CSR activity reports
• Reports on responses to natural disaster risks
Note: Earth Environment Committee and CSR Committee were integrated from FY2021.
Risk Management
Please refer to page 60 for information on the Company’s risk management systems.
Indicators and Targets
Climate Change-Related Indicators and Targets
Indicators
CO2 emissions from product use
CO2 emissions from production
Rate of renewable energy use
Targets
Decrease by 50% in 2030 (Base year of 2010, basic unit)
Decrease by 50% in 2030 (Base year of 2010, basic unit)
50% in 2030
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Resolution of ESG Issues through Growth Strategies
Message from the President of the Sustainability Promotion Division
Examples of Low-Emissions Products
Announcement of Fully Electric and Remote-Controlled Mini Excavator
Concept Machine Powered by Lithium-Ion Battery
Komatsu has announced a fully electric (non-hydraulic drive) and exclusively remote-con-
trolled mini excavator powered by lithium-ion battery, as its next-generation concept machine
for the future.
Designed to lay the foundations for commercialization of fully electric construction equip-
ment of the future, this concept machine for a fully electric 3-ton class (bucket capacity: 0.09
m3) mini excavator is based on Komatsu’s accumulated technological expertise in electric
forklifts and mini excavators, and incorporates new technologies, such as lithium-ion batteries
and electric cylinders which utilize no hydraulics.
Japanese market’s Launch of PC78USE-11 Wired Electric Excavator
In July 2021, Komatsu launched its PC78USE-11 wired electric excavator in the Japanese
market. The PC78USE-11 was developed for customers wanting to use an electric hydraulic
excavator continuously over long periods of time. This product capitalizes on Komatsu’s accu-
mulated technology to deliver the same level of performance as engine-driven equipment while
boasting zero emissions along with massive reductions in noise and heat emissions. These
features make the PC78USE-11 an eco-friendly wired electric excavator of the small to mid-
sized class.
Fully electric and remote-controlled mini
excavator concept machine powered by
lithium-ion battery
PC78USE-11 wired electric excavator
Message from the President of the Sustainability Promotion Division
In May 2021, Komatsu celebrated the 100th anniversary of its founding. In conjunc-
Voice
tion with this momentous occasion, the Company integrated its Corporate
Communications Department, Environmental Affairs Department, CSR Department,
Diversity Promotion Group, and Demining and Reconstruction Project to form the
Sustainability Promotion Division.
Komatsu’s basic policy for Corporate Social Responsibility (CSR) has always been to contribute to
society through its business. This spirit of pursuing coexistence with communities has been passed
down since our founding a century ago. The three-year mid-term management plan slated to conclude
with FY2021 describes our goal of achieving sustainable growth through a positive cycle of solving ESG
issues and improving earnings, and various initiatives are underway to achieve this goal. Furthermore,
we clarified Komatsu’s corporate identity in light of the 100th anniversary of its founding, defining our
purpose as creating value through manufacturing and technology innovation to empower a sustainable
future where people, businesses and our planet thrive together. This move sent a clear message of how
we intend to contribute to the realization of a sustainable society while also achieving business growth
for Komatsu. Our operating environment is constantly changing, and the pace of this change is acceler-
ating. To respond to this change, I look to further build upon the Komatsu Group’s sustainability manage-
ment approach. By maintaining the strengths we have fostered over the past century, we will position
change as an opportunity, boldly tackling new challenges to make Komatsu a more resilient company.
Mitsuko Yokomoto
Senior Executive Officer
President, Sustainability Promotion
Division
Since establishing the Komatsu Earth Environment Charter in 1992, Komatsu has maintained a proactive stance toward addressing climate change
and other environmental issues. Moreover, we put forth the target of halving CO2 emissions from 2010’s level by 2030 in the current mid-term manage-
ment plan, which was launched in FY2019. Komatsu has also endorsed the recommendations of the Task Force on Climate-related Financial Disclosures
(TCFD), and we are advancing a strategy for combating climate change based on assessments and scenario analyses of climate change-related risks and
opportunities. Furthermore, Komatsu Report 2021 features our declaration of our goal of achieving carbon neutrality in 2050 and provides information on
the new initiatives that this declaration entails.
I also hope to ensure that Komatsu is always a company at which employees can feel proud, motivated, and empowered in their work. For this reason,
I believe that promoting diversity and inclusion, the drivers of innovation, is also an important role of the Sustainability Promotion Division. Acting in accor-
dance with Komatsu’s management policy of “maximizing the trust given to us by our stakeholders and society through a commitment to quality and
reliability,” I will continue striving to help us live up to the demands and expectations of society.
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Resolution of ESG Issues through Growth Strategies
Developing People
Founder Meitaro Takeuchi established Komatsu Ltd. in Komatsu City, Ishikawa
Prefecture roughly a century ago. Having witnessed Europe’s cutting-edge tech-
nologies at that time, Takeuchi put forth the four management principles of global
expansion, quality first, technological innovation, and human resource develop-
ment. The commitment to the development of human resources, an invaluable
asset to Komatsu, lives on in the Company today.
Komatsu’s global engineers active in various fields
Japan
32%
Overseas
68%
Japan
6% (13)
Overseas
94% (200)
Number of
Employees
61,564
(consolidated)
(as of March 31, 2021)
Number of
Consolidated
Companies
213
(as of March 31, 2021)
Employees Supporting
Komatsu as a Global Company
Komatsu develops its operations around the world,
and approximately 70% of its employees are not
Japanese. Accordingly, developing human
resources that are rooted in the communities they
serve while promoting mutual acceptance of the
values and cultures of various countries and regions
is becoming increasingly important. Operations
around the world must be instilled with Komatsu’s
manufacturing competitiveness, which includes the
values that support Komatsu and workplace
improvement, driven by employees.
The Komatsu Way
The Komatsu Way is the very DNA of Komatsu, an expression of the strengths of Komatsu, the beliefs supporting
these strengths, the basic attitudes, and the patterns of behaviors established based on the experiences of our
predecessors as they proceeded to tackle the challenges facing them.
Komatsu seeks to develop its operations on a global scale and to become a stronger company and grow. To
accomplish these objectives, it will be crucial for us to transmit The Komatsu Way to employees with different
cultures and customs around the world and to implement these principles in a manner that aligns employees
along the same vector. In 2020, an English-language e-learning program pertaining to The Komatsu Way was
launched, and we completed the translation of the third version of The Komatsu Way into nine languages, posing
us to further entrench this doctrine throughout our global operations.
1 Leadership/Top Management
2 “Monozukuri ” for All
3 Brand Management
Leaders must be directly involved in the
Employees
workplaces and manage businesses with
Komatsu aims to pass on the manufac-
(Customer Value Creation
Activities)
an emphasis on contributing to the entire
turing competitiveness, perspectives,
Komatsu defines “Brand Management” as
Group, including distributors and suppli-
and values that, based on total quality
all the activities that “make Komatsu indis-
ers. We have also defined guidelines for
management, have continued to drive
pensable to our customers.” This objective
leaders related to actively engaging in
Komatsu’s competitiveness and support
is accomplished by visiting customer
regular board meetings, communicating
its growth. We look to transmit these
workplaces to understand the ideal state
with stakeholders, complying with rules of
principles through a joint effort encom-
of these customers and to build relation-
the business community, managing risks,
passing all internal divisions as well as our
ships that enable us to work together with
and grooming successors for manage-
suppliers, distributors, and other partners
them to help achieve their goals through
ment positions.
and to continue promoting involvement
concerted efforts by the Group and its
by all of these parties.
distributors.
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Global Engineer Cultivation and Empowerment
In the 2000s, resource demand began surging, stimulating growth in Komatsu’s mining
equipment business and simultaneously creating a need for the cultivation of staff that can
provide ongoing support at active customer workplaces around the world. To address this
need, Komatsu looked beyond Japan, with its shrinking workforce, to seek out human
resources overseas. As part of this undertaking, we adopted English as our official
Company language and turned our attention to the Philippines, where we were able to find
human resources that were highly proficient at adapting to overseas assignments. We thus
commenced a recruitment campaign aimed at acquiring talented human resources that had
graduated from local technical universities in this country.
The Komatsu Human Resources Development Center was established in November 2008
as a venue for recruiting and cultivating such talent and was later incorporated locally as
Komatsu Philippines Corporation in November 2019. To date, this company has hired more than
150 engineers as it has proceeded to expand its systems. The training program at Komatsu
Philippines involves a six-year curriculum comprising a 17-month basic product and service
course, a seven-month training period at factories in Japan, and four years of training at over-
seas mines. Individuals who have completed this program are officially hired as global engineers.
Today, global engineers are active in more than 20 countries worldwide, using their
experience and technical knowledge to make contributions at active customer workplaces
as well as at domestic service process improvement divisions and as technical training
instructors teaching distributors.
New building of Komatsu Philippines Corporation
Global engineer providing online training
on fuel-efficient operation
AI Education for Developing Key Personnel for AI Field Coordination
Artificial intelligence (AI) technologies are used in various fields for purposes such as maximizing
the value of customer operations and reforming in-house processes. The speed of progress in AI
technologies is increasing exponentially. For this reason, it is crucial for us to develop in-house
capacities for addressing the AI-related issues seen in specific business fields and to coordinate
with external partners boasting advanced technologies.
Based on this recognition, Komatsu launched dedicated programs for cultivating key personnel
in the AI field in 2019 with an eye to future expansion in the scope of coordination with external
partners in this field. These programs include a basic program, which gives participants the ability
to experience the process that spans from the definition of issues from a customer perspective to
Requirements of Key AI
Coordination Personnel
Technical Skill
Communication
Skills
Customer-
Oriented
Perspective
Business
Perspective
theme planning, and an advanced course, in which participants actually address issues through writing software. Through these two pro-
grams, we develop human resources capable of identifying pertinent themes from customer-oriented and business perspectives and
playing a central leadership role in internal and external coordination.
Global Engagement Survey
Continuous employee engagement is imperative to the ongoing growth of a company.
For this reason, Komatsu conducted a global engagement survey in April 2021 with the
Ongoing Corporate Growth
aim of periodically tracking and analyzing trends in employee engagement to gain an
understanding of the constantly changing issues in this regard to be reflected in human
resource measures. This survey targeted both domestic and Group companies.
Taking the form of an anonymous online questionnaire, the survey featured ques-
tions on such engagement-related topics as vision, strategic and competitive advan-
tage, leadership, and corporate culture and workplace environment.
The results of the survey were analyzed by region and by organization to clearly
identify the strengths of Komatsu and the issues it faces. This information will be
reflected in human resource measures and training and education programs to help
make Komatsu a place where employees feel motivated and empowered.
Vision
Organizational
and Operating
Structures
Continuous
Engagement
Strategic and
Competitive
Advantage
Leadership
Corporate
Culture and
Workplace
Environment
Human
Resources
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A Century of Creating the Workplaces of the FutureTop Management’s Views on Komatsu’s Management Issues and Strategies for the Next CenturyEvolution of Business Model for Creating the Workplaces of the FutureResolution of ESG Issues through Growth StrategiesCorporate Profile
Resolution of ESG Issues through Growth Strategies
Growing with Society—Social Contribution Activities
Komatsu recognizes that social contributions to the communi-
directly aimed at generating earnings. Based on this definition,
ties in which it conducts its business activities are an important
we seek to contribute to society in a manner that leverages the
corporate responsibility. Komatsu defines the social contribution
strengths of our core business.
activities as activities related to its three CSR themes that are not
Social Contribution Activities in FY2020
The following chart shows expenditures for social contribution activities by the Komatsu Group, aggregated
based on six general categories.
Academic and Industry–Academia
Collaborations
Culture & Sports
Disaster Relief
26%
25%
9%
Type of Social Contribution Expenditure
FY2020
Social Contribution
Expenditures
(Consolidated)
¥1,628 million
Human Resource Development 15%
Local Community Support
24%
Environment
1%
Cash contributions
¥582 million
Employee
dispatchment and
time contributions
¥142 million
Expense related to
providing own facilities
for public use
¥172 million
Expense related to
events for the
community
¥732 million
Total
¥1,628 million
Commencement of Agricultural Support Project Following Demining Project
Since 2008, Komatsu has been engaging in collaborative efforts
other equipment are being deployed to provide agricultural sup-
with the authorized nonprofit organization Japan Mine Action
port. Komatsu’s ICT-intensive bulldozers use ICT technologies to
Service (JMAS) to support the demining of anti-personnel land-
automatically control blades, making them highly effective at level-
mines in Cambodia and other areas threatened by these weapons
ling farmland (creating a flat surface with no uneven areas). In
and to help rehabilitate former mine field sites through the con-
FY2020, such equipment was used to level approximately 13
struction of roads, bridges, elementary schools and other facilities.
hectares of farmland, earning much praise from farmers for the
These activities were expanded in 2016 to support the removal of
contributions to increased rice harvests. We intend to expand the
unexploded ordnance in Laos. In this country, we are supplying
scope of this farmland support going forward.
Komatsu equipment, free of charge, along with technical guidance
Please refer to the following video for more information on
to assist in the machine-based removal of unexploded ordnance
the Demining and Reconstruction Project.
from cluster bombs. The next step in these activities came in
2020, when we commenced an agricultural support project in
Cambodia through which bulldozers, hydraulic excavators, and
Web
Please refer to the following video for more information on the
Demining and Reconstruction Project.
https://www.youtube.com/watch?v=OTHFyzCQAmo
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Business and Human Rights
1. Human Rights Policies
The Human Rights Policy was incorporated into the Komatsu
Komatsu established its Human Rights Policy in September
Code of Worldwide Business Conduct as part of the 2021 revision
2019, thereby declaring its commitment to conducting its busi-
to disseminate this policy to Group employees around the world.
ness in a manner that is compliant with internationally accepted
standards pertaining to respect for human rights throughout its
2. Human Rights Due Diligence
global organization. Based on this policy, processes have been
The following human rights due diligence process is imple-
established to prevent or mitigate negative impacts on human
mented on an ongoing basis in order to identify human rights
rights and to allow for corrective measures to be instituted
issues in our business activities and to formulate specific plans
should it be found that the Company was directly or indirectly
for addressing these issues.
involved in activities that had a negative impact on human rights.
(1) Human Rights Risk and Impact Assessments
Risk assessments are conducted to identify and assess human rights risks with the potential impact on our business activities. The
following assessments have been performed thus far.
2014
2017
2020
With the assistance of external specialist Business for Social Responsibility (BSR), assessments were conducted to evaluate human rights risks per-
taining to the construction equipment, mining equipment, and forestry machinery businesses being developed on a global scale.
The aid of BSR was once again enlisted for our second human rights assessment, which was carried out while referencing the Universal Declaration of
Human Rights and the United Nations Guiding Principles on Business and Human Rights.
With support from external specialist CSR Europe, a systematic human rights risk assessment of our global operations was conducted covering down-
stream areas of our construction equipment, mining equipment, and forestry machinery businesses (equipment and replacement part sales). Given the
characteristics of Komatsu’s businesses, relevant issues such as pertaining to discrimination based on ethnicity, race, or national origin; compulsory
labor; freedom of association; and fair work conditions were assessed, and potential risks and priorities were identified by business and by region.
(2) Screening
(4) Deployment Across Supply Chain
In its global operations, Komatsu has implemented a screening
Komatsu is promoting awareness regarding its CSR procurement
system for checking and restricting transactions with counter-
guidelines among suppliers for the purpose of ensuring that they
parties designated on sanction lists and in other documents. In
respect human rights. Furthermore, in FY2020 we began issuing
addition, the Company complies with trade embargoes and other
self-assessment questionnaires with regard to CSR activities to
provisions of international regulations. Going forward, we will
tier-1 suppliers in Japan and overseas in order to further spread
investigate the possibility of expanding the scope of this screen-
awareness of CSR across our supply chain. The target of the
ing to include responsible sales approaches and policies.
FY2020 questionnaire was the 156 Midori-kai member compa-
(3) Application to Employees and Distributors
responses have been received from 77 companies.
Komatsu administers e-learning programs to employees to
Please refer to the following website for more information.
ensure that they are aware of its human rights policies and to
https://komatsu.disclosure.site/en/themes/185
nies that are major suppliers of Komatsu in Japan. To date,
raise awareness of its measures for preventing and mitigating
negative impacts on human rights. After introducing these pro-
grams targeting all employees in Japan and the United States in
July 2020, we have been expanding the scope of application with
the aim of providing education on a global basis.
The Company does not maintain capital tie-ups with most of the
distributors that supply its products and services around the world.
However, we do coordinate with these business partners. Specifically,
a requirement to pledge to respect human rights in business activities
has been included in distributor contracts, and we discuss with dis-
tributors the possibility of them conducting voluntary due diligence
checks and establishing human rights policies based on the charac-
teristics of their respective regions and businesses.
Topics
Human Rights Initiatives in Myanmar
Myanmar has been judged as a region presenting significant potential risks.
Accordingly, since 2019 we have been calling upon external specialist
organizations to aid us in practicing due diligence in this region while
engaging in discussions for identifying threats and formulating response
measures. Based on the results of such discussions, it was decided that
we would not sell mining equipment units to jade mines in Myanmar from
2019 onward. In addition, we have halted operations at mining equipment
repair subsidiaries in this country, and the process of liquidating these
subsidiaries is underway. Going forward, we will continue to coordinate with
dealerships and external experts in Myanmar to formulate effective mea-
sures for ensuring respect for human rights in our business.
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A Century of Creating the Workplaces of the FutureTop Management’s Views on Komatsu’s Management Issues and Strategies for the Next CenturyEvolution of Business Model for Creating the Workplaces of the FutureResolution of ESG Issues through Growth StrategiesCorporate Profile
Resolution of ESG Issues through Growth Strategies
Growing with Society—Social Contribution Activities
Employee-Driven Social Contribution Project
One World One Komatsu
Komatsu defines CSR as activities to respond to social needs
encourages employees to take close-at-home action in their
through its core business and works to achieve sustainable
daily lives, such as cutting back on water use and turning off
growth together with society by addressing environmental,
lights in unoccupied rooms.
social, and governance (ESG) issues. The Komatsu Group
Moreover, to promote further action, we have developed an
launched the One World One Komatsu employee-driven social
exclusive platform that can consolidate the efforts of employees
contribution project as the first global initiative in which all
across the Group. This new platform can be easily accessed by
Komatsu Group employees around the world can take part in
logging in via a computer or smartphone. Furthermore, the plat-
conjunction with its 100th anniversary.
form transcends national and language barriers to connect
Based on themes pertaining to the environment and sus-
Komatsu Group employees around the world, to nurture a sense
tainability, which are shared global issues that are highly related
of unity as they work for a common goal, and to promote activi-
to our business, the One World One Komatsu project
ties designed for a sustainable planet.
Four Themes of One World One Komatsu
Employee Impact
Total actions completed
Participating teams
100,158
344
(As of August 5, 2021)
CO2 emissions
reduction
Water preservation
Renewable energy
Waste reduction
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Topics
One World One Komatsu Program Uniting
Employees in Worldwide Sustainability Effort
First launched as a pilot program in August 2020, the Company’s first
global CSR initiative, One World One Komatsu, grew rapidly in its first
year. Through the One World online platform, Komatsu employees are
encouraged to take sustainable actions that, when done collectively, transform into a global
movement to support environmental responsibility.
Despite the fact that it was launched during a global pandemic, One World brought
employees together, virtually, within the platform. The program’s environmentally-focused
challenges encourage Komatsu team members to focus on different sustainability priorities
over the course of the year to earn points for completing related activities. Employees
can share photos and comments about what they learned, encourage one another by
commenting on each other’s activity and share inspiration for the future through One
World’s idea boards.
While expanding One World program access to all areas of the Company in 2021,
Komatsu’s global CSR team leveraged the platform to achieve two other firsts for the
Company: Komatsu’s first global day of volunteer action for Earth Day and the launch of its
first worldwide sustainability competition for employees.
On April 22, 2021, Komatsu employees around the world took part in the Company’s
24-hours of Earth Day challenge, completing environmental actions those shown to the
right:
Working individually or in small groups, as required by ongoing COVID-19 restrictions at
that time, employees recorded their efforts in the One World platform, and submitted
photos and videos to be used for global watch parties that highlighted submissions from
around the world.
Caley Clinton
Senior Manager, PR CSR and Content
Komatsu Mining Corp. and Komatsu
America Corp.
Completed environmental
actions of Earth Day challenge
❶
❷
❸
Planting more than 14,000 trees
and native species
Picking up more than 3,500 bags
of trash
Volunteering more than 15,000
hours collectively
Web
To view videos from Komatsu’s global Earth Day celebration :
https://www.youtube.com/watch?v=rrf7QzwtyZQ&list=PLl09JNAS3JlEgHkUWebDvJlCWaJaQqm3L
The results of the global day of action were tallied up and reported out in time for the United Nation’s World Environment Day in June, at
which point an internal contest for employees was launched. The One World One Komatsu sustainability contest offers employees the
opportunity to compete in up to 10 categories for a chance to attend an awards ceremony planned for March 2022 in Japan.
Categories include some dedicated to competitions within the One World platform, while others encourage employees to think
creatively about sustainability or recognize a colleague for environmental responsibility.
Web
Watch a video of an overview of the Company’s CSR initiatives :
https://www.youtube.com/watch?v=ul99s-eO4p4&list=PLl09JNAS3JlGOCkNiCo8St7zLm6DUrcLC&index=6
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Resolution of ESG Issues through Growth Strategies
Corporate Governance
■ Message from an Outside Director
Promoting discussion to
identify areas needing
change in pursuit of
sustainable growth—
Cutting a strong start for
growing over the next
century
Makoto Kigawa
Outside Director
Strengths and Issues of Komatsu as a 100-Year-Old Company
I believe that Komatsu’s strengths can be seen in its unshakable
and innovativeness that are also strengths of Komatsu. Another
brand image, which was fostered through action based on the
strength is the corporate constitution that Komatsu has shaped
management principle of “maximizing the trust given to us by our
through exhaustive business structure reforms advanced based
stakeholders and society through a commitment to quality and
on the keyword of DANTOTSU since the turn of the century.
reliability,” as well as in the human resource development initia-
These strengths have led to a sense of confidence that suc-
tives based on The Komatsu Way (please see page 44) that sup-
cess can be achieved by adhering to Komatsu’s approach.
port this brand power. Despite the fact that, today, about 70% of
However, if this confidence turns into overconfidence, it might
Komatsu’s employees are of non-Japanese nationality, The
threaten to make the Company overly conservative in the face of
Komatsu Way is embraced by employees around the world and
change. I therefore think there is a need for discussion to clarify
has permeated all corners of the organization. The Komatsu
which aspects of Komatsu should be carried forward through the
Group truly is a united global organization, and the strength of
next century and which should be changed.
this unity forms the foundation for the manufacturing capabilities
Constructive Discussion at Board Meetings and Potential for Increased
Diversity to Improve Corporate Value
As a Director, I believe that I have an important role to play by
chains being disrupted due to extreme circumstances, which, in
providing advice pertaining to business strategies to the execu-
addition to the current COVID-19 pandemic, could include natu-
tive team based on an understanding that I am charged with
ral disasters, political conflicts, or other such issues. Given such
supervising the executive function. For example, I have manage-
risks, it is another important role of directors to confirm the cur-
ment experience related to the logistics industry. In 2020, we saw
rent conditions while also pointing out potential future risks and
a sudden jump in the price of marine transportation, and the
offering advice in relation to these risks.
resulting disruption to the parts supply chain has become a
I believe that Komatsu’s Board of Directors has an incredibly
social issue. We have been able to confirm that, at the moment,
conducive atmosphere for encouraging open discussion and
there have been no serious obstructions to local production or
sees frank exchanges of opinion. Board meetings begin with a
supply chain disruptions stemming from soaring parts transpor-
report from President Ogawa in which he explains the circum-
tation costs. Regardless, we must address the risk of supply
stances within the Company and any issues that he has
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51
identified. These reports are great for helping outside directors
of Komatsu’s Board of Directors or the evaluations of its effec-
understand what is going on inside of the Company. I quickly
tiveness. The June 2021 revision to Japan’s Corporate
adopted this approach and implemented these reports for board
Governance Code has created a need for even more robust
meetings at Yamato Holdings Co., Ltd., where I am representa-
corporate governance. I think that the diversity of the Board of
tive director. In addition, the president himself accurately
Directors will be key to realizing this more robust governance.
explains issues at Board meetings, which does a lot for the ease
Komatsu is evolving with the times. For example, it appointed a
of discussion. One particular example of this ease of discussion
non-Japanese Outside Director in 2020. However, if the
that comes to mind is the acquisition of Joy Global Inc. (cur-
Company were to evolve further, with an eye to the type of Board
rently, Komatsu Mining Corp.), which moved into the final deci-
membership that will be required in the future, it could create a
sion phase shortly after I became an Outside Director in 2016.
Board of Directors that would allow decision-making and over-
What makes this episode so memorable is how brisk and unre-
sight functions aimed at improving corporate value to be exer-
strained the discussion was, even among Outside Directors,
cised based on more diverse input and opinions. I think the
despite the late stage of the process. When a matter has been
decision to prepare and disclose a skill matrix detailing the
discussed a number of times, it is common for new opinions to
expertise of Outside Directors and Outside Audit & Supervisory
stop being heard at later stages of discussion. A company that
Board Members will help the Board of Directors become more
is able to engage in such a high degree of discussion is defi-
effective while driving the evolution of corporate governance at
nitely a healthy company.
the Company.
At the moment, I have no complaints about the composition
Changes in Komatsu’s Operating Environment, Issues, and Expectations for
the Next Mid-Term Management Plan
The current mid-term management plan was formulated based on
low environmental impacts.
discussions that took place when President Ogawa was still a
The third category of risks is competition risks in solutions
senior executive officer. I believe that there would be no issues
businesses, such as those pertaining to Smart Construction.
with transferring the basic framework of the current plan onto the
Komatsu’s solutions businesses are currently at a stage in their
next. However, the speed of change in the operating environment
growth in which it is time for the technologies and expertise
today exceeds that when the current plan was formulated.
Komatsu has developed in Japan to be deployed in overseas
Accordingly, it will be important to implement the next plan, while
markets. The Company is currently the frontrunner with regard to
making flexible revisions. Moreover, we are currently seeing
such solutions. However, if Komatsu is to maintain its competi-
increased political and economic instability along with massive
tiveness in this area, it will need to bring its levels of quality in line
changes in people’s values. Now is thus a crucial time when it
with international standards. This will be incredibly important, so I
comes to ensuring Komatsu can cut a strong start for growing
hope Komatsu will do what needs to be done. It is unlikely that
over the next 100 years.
Komatsu will see a sudden change in the competitive climate in
When formulating the next mid-term management plan, there
its core manufacturing operations. However, outside of these
are largely three categories of risks that will need to be consid-
operations, in service and solutions businesses, which are more
ered. The first is geopolitical risks. In recent years, we have seen
closely connected to end users, it is possible that there may be
an increased trend toward countries implementing policies solely
changes in competitors. Rivals with business models that had
for the benefit of their own national interests, giving rise to geo-
not been anticipated might also appear. Moreover, this is not an
economic risks. These risks could manifest in forms such as trade
era in which a company can be competitive in the solutions busi-
restrictions or tariffs; in areas related to financial markets, digital
ness on its own. The degrees to which Komatsu will pursue alli-
transformations, or intellectual properties; or even as acts of
ances and to which it will boldly move forward on its own will be
cyberterrorism or other extreme circumstances. It is therefore
important elements of strategies.
vital to discuss these risks before they materialize.
At the same time, a change of perspective could reveal that
The second category of risks is climate change risks. It can be
these risks actually represent business opportunities. I therefore
expected that coal businesses will become less prosperous in the
think it is important that Komatsu, with its exceptional manufactur-
future. This situation will create a need for Komatsu to consider
ing capabilities, identify new areas, areas in which it must change,
how to develop its mining equipment business, which caters to
and its strategies for these areas and accelerate its efforts as to
such coal businesses. At the same time, the Company must ramp
not become overly conservative.
up development of electric equipment and other products with
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Resolution of ESG Issues through Growth Strategies
Corporate Governance
Basic Stance on Corporate Governance
To become a company which enjoys more trust from all stakeholders, the Company is working to strengthen corporate
governance, improve management efficiency, advocate corporate ethics and ensure sound management on a group-wide
basis. To further improve the transparency of management for its shareholders and investors, the Company discloses
information in a fair and timely manner and actively engages in investor relations activities by holding meetings with
shareholders and investors.
Corporate Governance Framework
At the Company, the Board of Directors is positioned as the
System in 1999, the Company has separated management
core of corporate governance, and to improve the effectiveness
decision making and supervisory functions from
of discussions at meetings of the Board of Directors, the
executive functions to the extent permitted by laws and
Company has worked to put in place a system to ensure
regulations, and while appointing both Outside Directors and
thorough discussions of important management matters and
Outside Audit & Supervisory Board Members, limits the Board
prompt decision making, and reform their operational
of Directors to a small number of members.
aspect. Having introduced the Executive Officer (Shikko Yakuin)
Corporate Governance of the Company (As of June 30, 2021)
Figures in
represent the number of meetings in FY2020.
General Meeting of Shareholders
Elect / Discharge
15
times
Audit
Elect / Discharge
15
times
Audit &
Supervisory Board
(Standing 2 / Outside 3)
Office of
Corporate
Auditors’ Staff
Advise / Suggest
Board of Directors
(Standing 5 / Outside 4)
International
Advisory Board
Elect / Discharge /
Supervise
Report /
Submission
Executive Functions
President and CEO
Strategy Review Committee
Collaboration
Audit
Internal
Auditing
Dept.
Internal audit
Komatsu Group’s Global Operations
Executive Officers and Global Officers 57
• Japan 30
• Global 27 (including 19 foreign nationals)
Audit reports
Recommend
Elect / Discharge
Accounting Auditors
(Audit corporation)
Nomination
Advisory Committee
2
times
Recommend
Compensation Advisory
Committee
1
time
Major Committees
Product Safety Committee
Compliance Committee
Risk Management Committee
Export Control Committee
Sustainability Promotion
Committee
Disclosure Committee
Collaboration
Decide on the details of the items including election and discharge / Confirm suitability or independency of the Accounting Auditors
Recommend
Audit reports
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Activities of the Board of Directors
The Company holds Board of Directors’ meetings periodically at
ensure transparent and objective management.
least once every month. The Board of Directors deliberates and
In FY2020, Outside Directors and Outside Audit &
makes resolutions on important matters, determines manage-
Supervisory Board Members held meetings at which these out-
ment policies of Komatsu, and rigorously controls and super-
side officers shared opinions regarding management issues from
vises the execution of duties by all members of the executive
their objective and independent standpoints. Discussions with
management team including Representative Directors. Of the
the President were also arranged to foster shared recognition.
nine (9) Directors on the Board, four (4) are Outside Directors to
Characteristics of Komatsu’s Board of Directors
• Monthly reports from the CEO (recent important items and other topics)
• Monthly reports from the CFO (performance, order trends, borrowings, etc.)
• Annual proposal plans and follow-up
• Multiple discussions on important items (deliberation → resolution)
• Business reports to Board of Directors covering nearly 100% of sales-
generating activities
• Proactive expression of opinions by Audit & Supervisory Board Members
in addition to Directors
• Opportunities for free discussion at Board of Directors' meetings
Board of Directors’ Meeting Attendance and Agenda Item
Numbers in FY2020 (April 1, 2020–March 31, 2021)
Attendance
Outside Directors
Outside Audit & Supervisory
Board Members
Reports
Agenda item
numbers
Deliberations, Resolutions
Free discussion
100%
100%
41
33
3 times
Evaluation of the Effectiveness of the Board of Directors
The Company is working to improve the effectiveness of the Board of Directors and performs annual evaluations and analyses of the
effectiveness of the Board of Directors for this reason.
Evaluation Process
Survey
After discussion by the Board of
Directors on the method to be used
for FY2020 evaluation, based on the
method applied in the previous year
and the results thereof, the Company
conducted a survey out of consider-
ation for the nature of an effective
Board of Directors.
Survey topics:
Collection of survey
results from all Directors
and Audit & Supervisory
Board Members
Discussion among
Outside Directors and
Outside Audit &
Supervisory Board
Members based on
survey responses
Report of discussion
results, evaluation and
analysis of effectiveness,
and discussion of the
matters for improvement
at meeting of the Board of
Directors
• Composition of the Board of Directors
• Contents of agendas
• Straightforward and meaningful discussions
• Provision of information and presentation of
agendas by executives
• Structure through which important matters are
reported, proposed, and followed up
• Succession plans for CEO
• Other items
Outline of the Results
The assessment shows a generally high level of achievement for
With respect to the conducting of Board meetings, positive
each item and confirms that there were no serious problems con-
evaluations were received with regard to the arrangement of
cerning the effectiveness. The Company received excellent evalua-
online meetings in response to the COVID-19 pandemic, but
tions for various factors, such as the following: the timely sharing of
there were a few suggestions for improvement pertaining to the
issues, problems, and other information provided in monthly
need to expand the range of specific strategic themes discussed
reports by the President himself in Board meetings and the fact that
and to the nature of regular reports on business execution. The
Board members followed up the implementation status of resolu-
Company will make those improvements and work to make the
tions made by the Board of Directors based on regular reports.
Board of Directors further effective in the future.
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Resolution of ESG Issues through Growth Strategies
Corporate Governance
Corporate Governance Reforms
The Company has proceeded to implement reforms to its corpo-
execution of duties. As a means to supplement executive func-
rate governance system in order to ensure effective and ade-
tions, the Company established the International Advisory Board
quate performance of matters related to decision making,
(IAB) in 1995. Through the IAB, the Company aims to secure
management and supervision, such as separation of corporate
objective advice and suggestions from experts from Japan and
management from business execution, enhancement of corpo-
abroad about how to function as a global company by exchang-
rate management decision making by the Board of Directors,
ing opinions and holding discussions. Going forward, the
strict management and supervision of business execution, mea-
Company will pursue increases to the effectiveness of the Board
sures undertaken by Outside Directors to improve transparency
of Directors while appointing Outside Directors to ensure trans-
and objectivity of management, and measures undertaken by the
parency and soundness and promoting openness and account-
Audit & Supervisory Board to appropriately audit Directors’
ability in management.
Board of Directors
28 members
(0 Outside Directors)
1999:
8 members
(1 Outside Director)
2003:
8 members
(2 Outside Directors)
2005:
10 members
(3 Outside Directors)
2017:
8 members
(3 Outside Directors)
2021:
9 members
(4 Outside Directors)
Audit & Supervisory Board
3 members
(1 Outside Audit &
Supervisory Board
Member)
1994:
2006:
4 members
(2 Outside Audit & Supervisory Board Members)
5 members
(3 Outside Audit & Supervisory Board Members)
Other organizations and systems
Executive Officer System
(1999)
Global officers
(2016)
Compensation Advisory Committee
4 outside members, 1 standing member
(1999)
7 outside members, 1 standing member
(2020)
Nomination Advisory Committee
(2015)
3 outside members, 2 standing members
International Advisory Board
(1995)
3–4 domestic and overseas experts
Hitech & Innovation International Advisory Board
(2015)
4–6 overseas experts
Compliance Committee
(2001)
Members of senior management and labor representatives
Composition of Directors and Audit & Supervisory Board Members (As of June 30, 2021)
Outside
4
Of whom,
non-Japanese 1
Of whom, women 1
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5
Directors
Outside
3
Of whom,
women 1
Audit &
Supervisory
Board Members
Internal
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Major Activities of Outside Directors and Outside Audit & Supervisory Board
Members in FY2020
Outside Directors
Makoto Kigawa
Major Career
Representative Director at both
Yamato Holdings Co., Ltd. and
Yamato Transport Co., Ltd.
Mr. Makoto Kigawa previously served as Representative Director at both Yamato Holdings Co.,
Ltd. and Yamato Transport Co., Ltd. He has been actively expressing a wide range of opinions
at the meetings of the Board of Directors mainly from the standpoint of appropriately monitor-
ing the management strategies of the Company and contributing to the enhancement of the
Company’s medium- and long-term corporate value. During FY2020, he accordingly provided
comments based on his rich experience in the business world, particularly concerning such
issues as working from home and other personnel arrangements, competitive strategies
involving ICT, and inventory management. He also served as Chairman of the Company’s
Nomination Advisory Committee and the Compensation Advisory Committee.
Attendance of the Meetings
Meeting of the Board of Directors 100%
(15 meetings out of the 15 meetings held)
Takeshi Kunibe
Major Career
Representative Director of
Sumitomo Mitsui Financial
Group, Inc.
Representative Executive Officer
of Sumitomo Mitsui Banking
Corporation
Mr. Takeshi Kunibe has served as Representative Director, President of Sumitomo Mitsui Banking
Corporation and Representative Director and President as well as Director President and
Representative Executive Officer of Sumitomo Mitsui Financial Group, Inc., and serves as Chairman
of the Board of said company. He has been actively expressing a wide range of opinions at the
meetings of the Board of Directors, mainly from the standpoint of contributing to sustaining and
improving transparency and soundness of management as well as enhancing corporate gover-
nance. During FY2020, he accordingly provided comments based on his rich experience in the
business world, particularly concerning the M&A management system, business plan during the
COVID-19 pandemic, and ESG initiatives. In addition, he was a member of the Company’s
Nomination Advisory Committee and the Compensation Advisory Committee.
Arthur M. Mitchell
Major Career
Foreign lawyer of White & Case
LLP
Mr. Arthur M. Mitchell has worked for many years as a New York state attorney and foreign law
attorney in Japan. He has been actively expressing a wide range of opinions at the meetings
of the Board of Directors, mainly from the standpoint of mitigating and avoiding risk in the
Company’s global business operations and contributing to the enhancement of the
Company’s medium- and long-term corporate value. During FY2020, he accordingly provided
comments based on his international perspective and professional standpoint, particularly
concerning such issues as business alliance strategy, data-related legal compliance, and ini-
tiatives geared to the North American market. In addition, he was a member of the Company’s
Nomination Advisory Committee and the Compensation Advisory Committee.
Attendance of the Meetings
Meeting of the Board of Directors 100%
(11 meetings out of the 11 meetings held)
Attendance of the Meetings
Meeting of the Board of Directors 100%
(11 meetings out of the 11 meetings held)
Note: As Outside Directors Mr. Takeshi Kunibe and Mr. Arthur M. Mitchell were elected at the 151st Ordinary General Meeting of Shareholders held in June 2020, their maximum number of
meetings of attendance is different from that of the other Directors.
Outside Audit & Supervisory Board Members
Hirohide
Yamaguchi
Major Career
Deputy Governor of the
Bank of Japan
Eiko Shinotsuka
Major Career
Professor Emeritus,
Ochanomizu University,
Commissioner, National
Personnel Authority, Member of
the Bank of Japan’s Policy Board
Kotaro Ohno
Major Career
Prosecutor-General, Special
Counsel, Mori Hamada &
Matsumoto
Mr. Hirohide Yamaguchi previously served as Deputy Governor of the Bank of Japan. During
FY2020, based on his professional standpoint, he provided comments at the meetings of the
Board of Directors and the meetings of the Audit & Supervisory Board concerning such issues
as the status of the global economy, demand trends, and audit systems. In addition, he was a
member of the Company’s Compensation Advisory Committee.
Attendance of the Meetings
Meeting of the Board of Directors 100%
(15 meetings out of the 15 meetings held)
Meeting of the Audit & Supervisory Board
100%
(15 meetings out of the 15 meetings held)
Ms. Eiko Shinotsuka possesses wide-ranging knowledge and experience in fields such as
economics, labor relations, and law. During FY2020, based on her professional standpoint,
she provided comments at the meetings of the Board of Directors and the meetings of the
Audit & Supervisory Board concerning such issues as utilizing global human resources, envi-
ronmental measures, and employee safety and health management. In addition, she was a
member of the Company’s Compensation Advisory Committee.
Attendance of the Meetings
Meeting of the Board of Directors 100%
(15 meetings out of the 15 meetings held)
Meeting of the Audit & Supervisory Board
100%
(15 meetings out of the 15 meetings held)
Mr. Kotaro Ohno possesses rich experience in the legal profession. During FY2020, based on
his professional standpoint, he provided comments at the meetings of the Board of Directors
and the meetings of the Audit & Supervisory Board concerning such issues as the compli-
ance system, Group company management, and securing human resources. In addition, he
was a member of the Company’s Compensation Advisory Committee and an observer of the
Compliance Committee.
Attendance of the Meetings
Meeting of the Board of Directors 100%
(15 meetings out of the 15 meetings held)
Meeting of the Audit & Supervisory Board
100%
(15 meetings out of the 15 meetings held)
Introduction of New Outside Directors
The following one new outside director was appointed at the General Meeting of Shareholders held in June 2021.
Naoko Saiki
Major Career
Director-General, Economic
Affairs Bureau and International
Legal Affairs Bureau, Ministry of
Foreign Affairs
Ms. Naoko Saiki has considerable knowledge and abundant experience in international affairs, international law, and the field of economics as she
served in positions such as Director-General of the Economic Affairs Bureau and Director-General of the International Legal Affairs Bureau at the
Ministry of Foreign Affairs.
Utilizing this knowledge and experience, her recommendations concerning the overall management of the Company are expected to contribute
to the enhancement of the medium- to long-term corporate value of the Company. Therefore, the Company nominates her as a candidate for
Outside Director.
Although Ms. Saiki has no experience in participating in the management of other companies directly, the Company judged that she would be
able to execute the duties of Outside Director adequately because of the reasons above.
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Corporate Governance
Activities of Advisory Committees
Committee Name
Nomination Advisory Committee
Compensation Advisory Committee
Chairman
Outside Director (Makoto Kigawa)
Outside Director (Makoto Kigawa)
Members
(As of June 30, 2021)
4 Outside Directors (Makoto Kigawa, Takeshi Kunibe,
Arthur M. Mitchell, Naoko Saiki )
Chairman of the Board
President
Purpose
Selection of next President and deliberation, resolution, and
reporting to the Board of Directors on human resource devel-
opment methods, succession plans, and appointment and
dismissal of Directors
4 Outside Directors (Makoto Kigawa, Takeshi Kunibe,
Arthur M. Mitchell, Naoko Saiki )
3 Outside Audit & Supervisory Board Members (Hirohide
Yamaguchi, Eiko Shinotsuka, Kotaro Ohno)
1 external expert (Advisor: Shinji Hatta, Honorary Professor,
Aoyama Gakuin University)
Chairperson of the Board
Deliberation, resolution, and reporting to the Board of
Directors and Audit & Supervisory Board on remuneration
systems for Directors, Audit & Supervisory Board Members,
and Executive Officers to ensure objectivity and
transparency
Meetings in FY2020
2
1
Agenda items in
FY2020
• Selection and cultivation of candidates for next President
• Selection of a new Outside Director candidate
• Concurrent positions held by Chairman of the Board and
• Monthly compensation levels for Directors and Audit &
Supervisory Board Members in FY2021
• Performance-based remuneration for Directors for FY2020
Outside Directors
(projections)
• Proposal of Directors and Audit & Supervisory Board
• Evaluation indicators for performance-based remuneration
Members for FY2021, etc.
in FY2021
Succession Plans
One of the items contained in the Code of Conduct for
In addition, successors for important domestic and overseas
Leadership/Top Management that has been described in The
positions up to and including that of the President are decided
Komatsu Way since its establishment in 2006 is “continue to
through the annual implementation of succession plans (see
think about your succession plan.”
chart below).
In order to ensure that Komatsu’s management values are
Selected successors are assigned to challenging tasks and
transmitted to the next generation, the basic requirements for
granted even larger roles in the organization to systematically
candidates for the position of President are discussed and
develop them in an environment that encourages the pursuit of
clearly defined by the Human Resource Advisory Committee.
mutual growth.
Overview of Succession Plans
Results Feedback
Succession Plans
Evaluation and Selection of
Successors
Human Resource Relocations
and Cultivation
Oversight of Implementation Process
Board of Directors
Human Resource Advisory Committee
Key Points for Cultivating
Leadership/Top Management
Successors
1. Foster willpower necessary to overcome challenges by having candidates experience
extremely difficult situations
2. Nurture organizational operation capabilities needed to unite parties with differing interests
3. Cultivate compliance awareness to prevent misconduct
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Remuneration Systems
In an effort to maintain an objective and transparent remunera-
single fiscal year (bonus in cash and the Stock-Based
tion system, the policy and levels of remuneration for Directors
Remuneration A) as well as the performance-based remunera-
and Audit & Supervisory Board Members of the Company are
tion (Stock-Based Remuneration B) that will reflect the degree of
deliberated by the Compensation Advisory Committee. Taking its
achievement of the targets raised in the mid-term management
reports and recommendations into consideration, the remunera-
plan, so that it will further contribute to the enhancement of the
tion for Directors is determined by the Board of Directors, and the
medium- and long-term corporate value of the Company, by
remuneration for Audit & Supervisory Board Members is deter-
linking the remuneration.
mined by discussions by the Audit & Supervisory Board
The remuneration for Outside Directors only consists of basic
Members, respectively, within the range previously determined
remuneration (fixed remuneration) designed to support their role to
by resolution of the General Meeting of Shareholders. With
make recommendations with respect to the overall management
regard to the level of monthly remuneration paid as basic remu-
of the Company as a member of the Board of Directors.
neration, comparison by position at other key, globally active
Furthermore, the remuneration for Audit & Supervisory Board
manufacturers in Japan is made by the Compensation Advisory
Members only consists of basic remuneration (fixed remuneration)
Committee and is reflected in its reports and recommendations.
designed to support their independent position with authority to
The remuneration for Directors excluding the Outside
audit the execution of duties by Directors without getting fettered
Directors (hereinafter “Internal Directors”) comprises basic remu-
by the movements of corporate performance of the Company.
neration (fixed remuneration) and performance-based remunera-
The retirement allowance system for Directors and Audit &
tion linked to the Company’s consolidated performance for a
Supervisory Board Members was terminated as of June 2007.
Composition of Remuneration of Directors and Audit & Supervisory Board Members
Internal
Directors
Basic Remuneration
(Fixed Remuneration)
Performance-Based Remuneration for a Single Year
(Monthly Remuneration x 0–24 months)
Performance-Based Remuneration Linked to
Performance of Mid-Term Management Plan
(Monthly Remuneration x 0–3 months)
Monthly remuneration x
12 months
Bonus in Cash (2/3, in
principle)*
Stock-Based Remuneration A
(1/3, in principle)
Restricted Stocks
Stock-Based Remuneration B
Restricted Stocks
Outside
Directors and
Audit &
Supervisory
Board Members
Basic Remuneration
(Fixed Remuneration)
Monthly remuneration x
12 months
Not influenced by Company performance
* The upper limit for Bonus in Cash is set at 12 months’ worth of monthly remuneration; the remainder of bonuses is to be paid as Stock-Based Remuneration A.
Performance-Based Remuneration Linked to Performance of Mid-Term Management Plan
The Company will pay Internal Directors the equivalent of a three-month portion of monthly remuneration every fiscal year as remuneration linked to
the period of the Company’s Mid-Term Management Plan by granting restricted stock as stock-based remuneration (Stock-Based Remuneration B). In
deciding Stock-Based Remuneration B, after the expiry of the period of the mid-term management plan, the number of shares on which to lift transfer
restrictions (within a range of 0–100%) will be decided based on the achievement of the management targets of the Mid-Term Management Plan
presented in the following table and as a general rule; the restriction of transfer on the shares will be lifted after three years from delivery.
Management Indicators and Management Targets in Mid-Term Management Plan (FY2019–FY2021)
Management Indicator
Management Target
Growth
Profitability
Efficiency
• Sales growth rate
• Growth rate above the industry’s average*1
• Operating income ratio
• Industry’s top-level operating income ratio*1
• ROE
• ROE of 10% or higher
Financial position
Retail finance business
• Net debt-to-equity ratio*2
• ROA
• Net debt-to-equity ratio*2
• Industry’s top-level financial position
• ROA of 1.5% to 2.0%
• 5.0 or under for net debt-to-equity ratio*2
ESG
• Reduction of environmental impact
• Evaluation by external organizations
• CO2 emissions: Decrease by 50% in 2030 from 2010
Renewable energy use: Increase to 50% of total energy use in 2030
• Selected for DJSI*3
(World & Asia Pacific) and for CDP*4 A-List (Climate Changes and Water Risk), etc.
Shareholder return
• Consolidated payout ratio
buybacks), while placing main priority on investment
• Set goal of a consolidated payout ratio of 40% or higher
• Keep a fair balance between investment for growth and shareholder return (including stock
*1 Relative comparison with domestic and foreign major competitors in the same industry
*2 Net debt-to-equity ratio = (Interest-bearing debt – Cash and cash equivalents – Time deposits) / Shareholders’ equity of the Company
*3 Dow Jones Sustainability Indices: SRI indices generated by S&P Dow Jones of the United States and RobecoSAM of Switzerland
*4 International non-profit organization that advocates the reduction of greenhouse gas emissions and protection of water resources and forests by companies and governments
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Resolution of ESG Issues through Growth Strategies
Corporate Governance
Major Executive Committees
Committee Name
(Committees indicated with an
asterisk [*] are chaired
by the President.)
Purpose
Meeting Frequency
Product Safety
Committee
Effective promotion of Companywide product safety activities based on basic product safety
policies defined in product safety regulations
2 times a year and when
necessary
Compliance Committee*
Discussion on and decision and execution of policies and important measures pertaining to group-
wide compliance
2 times a year and when
necessary
Risk Management
Committee
Primarily discussion and approval of group-wide risk management tasks and risk countermeasures
1 time a year and when
necessary
Export Control
Committee
Discussion on and decision and execution of policies and important measures regarding group-wide
export control (trade security management)
1 time a year and when
necessary
Sustainability Promotion
Committee*
Formulation of group-wide environmental measures and discussion of progress to facilitate
promotion of environmental preservation throughout the Group and discussion on and execution of
group-wide CSR policies and important measures and activities
1 time a year and when
necessary
Disclosure Committee
Discussion and assessment to facilitate accurate information disclosure as required by the Financial
Instruments and Exchange Act and submission of recommendations to internal information control
representatives regarding judgments on material developments
4 times a year and when
necessary
The Komatsu Way
Committee*
Discussion on and decision and execution of policies and important measures regarding human
resources, labor affairs, education and human resource development, The Komatsu Way, total quality
management, employee benefits, and occupational health and safety management for the
Company and the Group
2 times a year
Appointments of Advisors of the International Advisory Board
Topics
Komatsu established the IAB back in 1995 for the Board of Directors to incorporate, from external experts, objective
advice and suggestions concerning management and operations of Komatsu as a global company. The IAB has met
a total of 36 times in the conventional and new organizations combined. In April 2020, Komatsu commenced the 8th
session of the IAB for management with the following new advisors. The term of service for each advisor is set at
three years as a general rule.
Komatsu will continue to incorporate advice and suggestions from IAB advisors with expertise in global business, further improve
management, and strengthen its corporate governance in order to enhance its corporate value.
Advisors of the 8th Session of the IAB for Management (FY2020–FY2022)
Name
Current Position and Brief Background
R. David Hoover
Kusmayanto Kadiman
Risto Siilasmaa
Mitoji Yabunaka
2018–Present
2015–February 2021
2009–2018
2000–2015
1996–2013
Chairman of the Board, Elanco Animal Health
Board of Directors, Edgewell Personal Care Company
Board of Directors, Eli Lilly and Company
Board of Directors, Energizer Holdings, Inc.
Board of Directors, Ball Corporation (Chairman, 2002–2013)
2015–Present
2010–Present
2004–2009
2001–2004
2006–Present
2012–2020
2018–Present
2014–2020
2008–2010
Vice President Commissioner of PT Adaro Power
President Commissioner of BFI Finance
The State Minister for Research and Technology of the Republic of Indonesia
President of Bandung Institute of Technology (ITB)
Chairman of the Board of Directors, F-Secure Corporation
(He is the founder of F-Secure Corporation.)
Chairman of the Board of Directors, Nokia Corporation
Visiting Professor, Ritsumeikan University
Outside Director, Komatsu Ltd.
Vice Minister, Ministry of Foreign Affairs
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Stakeholder Engagement
In order to gain more trust from all stakeholders, the Company is strengthening corporate governance and top management is practicing
direct engagement with stakeholders.
Share information on the Komatsu Group’s vision and
the issues it faces (employees, suppliers, distributors)
Provide as many opportunities for engagement as
possible and practice proper information disclosure to
facilitate understanding of Komatsu
Society
Distributors
Customers
Employees
Suppliers
Shareholders
Distributor
meetings
Midori-kai
General meet-
ings with
management
Meetings with
the President
Visits from top
management
General
Meeting of
Shareholders
Shareholder
meetings
Investors and
Analysts
Visits to inves-
tors worldwide
Analysts
meetings
Financial results
briefings
Mass media
Communities
Interviews
Meetings with
mayors, gover-
nors, etc.
Direct Communication by Top Management
Major Investor Relations Activities in FY2020
To further improve the transparency of management for our
continued to provide and enhance communication activities
shareholders and investors, we disclose information in a fair and
nonetheless, employing virtual and online venues for events and
timely manner and actively engage in investor relations activities
providing access to archived video. In addition, we established an
by holding meetings with shareholders and investors.
official Komatsu YouTube account, which is being used for orga-
In FY2020, certain face-to-face communication activities
nizing and distributing the latest videos on the Company.
were canceled in response to the COVID-19 pandemic, but we
For Institutional Investors
Financial results briefings* (4 times)
Small meetings* (7 times)
Business briefings* (1 time)
Overseas investor relations activities*
(4 times)
Individual meetings* (over 190)
* Held through virtual or online venues
For Shareholders and
Individual Investors
Shareholder meetings* (1 time)
Factory tours for shareholders canceled →
Replaced with virtual factory tours and videos
Individual investor meetings* (4 times)
Gifts of appreciation for long-term
shareholders
Homepage
Financial information
• Financial results briefings
• Sales and profits gains reports
• Quarterly reports, etc.
Web interviews with the President
(4 times)
Komatsu Report, etc.
Engagement Topics
Komatsu holds meetings for institutional investors and securities analysts to deepen their understanding of the Company. The following online
meetings were held in 2020.
Date
Meeting Name
Attendants
Topics
December 16, 2020
KOMATSU IR-DAY 2020
90
1. The pursuit of safety and productivity at mine sites
2. Komatsu’s environmental activities
Web
For materials from meetings, please refer to Komatsu’s corporate website:
Web
Komatsu’s Official YouTube Channel
https://www.komatsu.jp/en/ir/library/results/2020
https://www.youtube.com/c/komatsu/featured
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Resolution of ESG Issues through Growth Strategies
Corporate Governance
Risk Management
Basic Principles and Structure for Risk Management
In addition to the basic policy for risk management to ensure busi-
measures in place for each risk, as well as to take control of risks
ness continuity and stable development, Komatsu has established
when they arise. The committee regularly reports on its delibera-
Risk Management Rules to correctly recognize and manage risks.
tions and activities to the Board of Directors.
Furthermore, we have developed the Basic Manual for Risk
Komatsu will establish an emergency headquarters when
Management, which defines the response systems and rules to be
serious risks, such as the COVID-19 pandemic, occur and imple-
utilized should a risk materialize along with specific risk items and
ment appropriate measures to minimize damage. Other impor-
the divisions responsible for said risk items. This manual is periodi-
tant matters to be considered from the perspective of risk
cally revised to ensure that risk management systems are adapted
management include corporate governance; compliance;
to the constant changes in the operating environment and in risks.
response measures for climate change, pandemics, and other
Komatsu has established a Risk Management Committee to
natural disaster risks; and frameworks for preventing transactions
devise relevant policies for the entire Group, review the risk man-
with antisocial forces. We continue management efforts related
agement system, and evaluate and improve upon response
to these matters.
Risks Surrounding the Company
Risk Management System
Hazard Risk
Risks of natural disasters and
other disasters caused by exter-
nal factors
Operational Risk
Inherent risks associated with
corporate activities such as the
violation of laws and scandals
Strategy Risk
Risks related to significant
changes in social situations and
business uncertainties
Financial Risk
Risks related to finance including
fluctuations in interest rates and
stock prices
Report as
needed
Review
regularly
Board of Directors
President
Report
regularly
i
R
s
k
M
a
n
a
g
e
m
e
n
t
R
u
e
s
l
i
B
a
s
c
M
a
n
u
a
l
i
f
o
r
R
s
k
M
a
n
a
g
e
m
e
n
t
Report
regularly/
Report as
needed
Risk Management Committee
(When serious risks are exposed: Emergency Headquarters)
Risk Management Committee
Executive Office
(General Affairs Department)
Primary division responsible for each risk
• Identify and review risk recognition
• Perform activities to prevent risks and minimize their effects
• Take action when a risk is exposed
Each division and each Group company
Expert committees
• Product Safety Committee • Compliance Committee
• Export Control Committee • Sustainability Promotion
Committee
Report
regularly
Response to Climate Change
Approximately 90% of the CO2 emissions from the lifecycles of
production by 2030. This goal will be pursued through exhaustive
Komatsu construction equipment are attributable to product
reforms to production processes in order to prepare for cost
operation. Accordingly, we have the potential to help mitigate
increases. At the same time, we project that demand may rise for
climate change by providing low-carbon products and solutions
copper and other resources necessary for items used to electrify
that have carbon reducing benefits like Smart Construction.
equipment, such as motors, batteries, and fuel cells. Seeking to
Conversely, if we do not conform to the regulatory requirements of
seize this opportunity, we are expanding our hard rock mining
the relevant countries or with the demands of markets or if we are
business (response to transition and opportunity risks).
impacted by rapid changes in resource demand, market entry by
Meanwhile, the rise in natural disasters associated with cli-
new competitors, or higher manufacturing costs due to the intro-
mate change is creating risks of damages to the Company and
duction of carbon taxes, we will risk suffering future impacts to our
its supply chain. We are therefore taking steps to identify the
earnings. To address these risks, Komatsu has set the goal of
water-related risks threatening the Company and its supply chain
halving the CO2 emissions from product operation by 2030, and
while instituting business continuity plan (BCP) drills and other
R&D activities are being advanced toward the accomplishment of
measures to mitigate these risks (response to physical risks).
this goal. We have also set the goal of halving CO2 emissions from
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Response to the COVID-19 Pandemic
To fulfill its responsibilities to customers involved in businesses that
(3) Online Provision of Information to Stakeholders
support social infrastructure (essential businesses), the Komatsu
In December 2020, Komatsu held its first online shareholder meet-
Group has continued to supply products, parts, and services to its
ing. This communication venue allowed management to field ques-
customers while implementing exhaustive measures to prevent the
tions in real time and to engage in discussions with shareholders. In
spread of COVID-19. In March 2020, we set up an emergency head-
addition, the FY2021 General Meeting of Shareholders was con-
quarters with the president as its chairperson to collect and share
ducted in the form of our first live internet broadcast on the day of
information on the COVID-19 pandemic on a global scale and to
the meeting.
confirm and deploy response policies.
(1) Business Continuity Initiatives
Production at certain Komatsu factories was impacted by factors
Other online information provision initiatives included the distri-
bution of virtual factory tour videos of the Awazu Plant and the
Ibaraki Plant. These videos offer a vivid way to experience
Komatsu’s production sites by allowing viewers to manipulate their
such as government-instituted lockdowns. However, even prior to
viewpoint in 360° so that they can observe the construction equip-
the COVID-19 pandemic, Komatsu has been practicing cross-
ment assembly process from whatever angle they please.
sourcing to facilitate flexible production at all factories around the
world to absorb the impacts of regional demand and foreign
exchange rate fluctuations. These efforts also proved effective at
curbing the impacts of the pandemic.
Risks associated with supplies of parts from suppliers were
addressed by prioritizing allocation of inventories along our supply
chain to regions facing shortages. In addition, alternative parts were
developed and alternative suppliers were secured to prevent losses
of sales opportunities attributable to parts shortages.
(2) Workplace Infection Prevention Measures
With the safety and health of customers, partner companies, people
in local communities, and employees and their families as its priority,
Virtual factory tours
Awazu Plant
Web
https://www.youtube.com/watch?v=8rdu3LWaxs0
Web
Ibaraki Plant
https://www.youtube.com/watch?v=3myugOFcSEg
the Komatsu Group endeavored to prevent the spread of COVID-19
(4) Prevention of Infection of Customers through
based on the government policies in each country.
Construction Workplace Digital Transformation
Specific measures included utilizing our teleworking system to
To prevent the spread of COVID-19, the Ministry of Land,
promote teleworking. Approximately 70% of headquarters employ-
Infrastructure, Transport and Tourism advises people to avoid
ees engaged in teleworking during the periods of Japan’s state of
crowed spaces, closed environments, and close interactions.
emergency declarations. Also during these periods, we canceled or
Seeking to help prevent such conditions at construction sites,
postponed domestic business trips, events, trainings, and seminars,
Komatsu is promoting its Smart Construction Digital Transformation
and utilized remote methods for all in-house trainings, in principle.
solution. This solution uses a digital twin methodology that allows
At production sites, fans were installed and windows were
workplace representatives to monitor conditions remotely without
opened to ensure good ventilation, and we also built additional
gathering in a single location, thereby helping to prevent the
breakrooms, staggered break times, and took other steps to prevent
spread of COVID-19.
the spread of COVID-19 in workplaces.
Safety and health of customers, partner
companies, people in local communities,
and employees and their families
Exhaustive infection prevention
measures
Government policy
Komatsu technologies
Coordination with other companies
Acceleration of construction
and mine workplace digitiza-
tion and automation
Ongoing supply of products and assistance
necessary to customers involved in businesses
that support social infrastructure
(essential businesses)
Strategic minimization of infection risks through
provision of new solutions
Dialogue with stakeholders and timely and appropriate information disclosure
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Resolution of ESG Issues through Growth Strategies
Corporate Governance
Establishing a business continuity plan (BCP) and providing training
Komatsu has established business continuity plans (BCPs) to
standards for frontline sites have been clarified to facilitate swift
ensure the continuity of core operations and to facilitate quick
decisions by senior management should a disaster strike.
resumption of operations should they be interrupted. As part of
We are focused on not only strengthening the BCPs of
these plans, we hold regular initial response and production resump-
Komatsu Group bases but also on strengthening the supply
tion drills based on major earthquake and water damage scenarios.
chain system through support of our business partners. Recent
At production bases, we implement measures to reinforce the seis-
initiatives to this effect have included holding nationwide semi-
mic resistance of structures and production equipment while imple-
nars on initial disaster responses and measures to be taken
menting countermeasures to safeguard against water and wind
under normal conditions to build response frameworks led by
damage from concentrated heavy rains and other weather events in
experts on these subjects. Several partners were invited to take
order to minimize the impacts of increasingly more severe natural
part in these seminars. Going forward, we will continue to pro-
disasters. Moreover, the disaster response reporting chains and
mote and further enhance our group-wide BCP initiatives.
1995
2007
2011
2018
2019
2020
Great Hanshin
Earthquake
Chuetsu Offshore
Earthquake
Great East Japan
Earthquake
Heavy Rains in West
Japan
Typhoon Hagibis
2020 Kyushu floods
Initial response
manual develop-
ment for ensuring
safety
• Preparation of disaster
response manuals
• Formulation of
risk-related regulations
Business
continuity manual
development
• Preparation of BCPs for
specific bases
• Establishment of
headquarters BCP drill
regulations
Group-wide
deployment of
response
measures
• Installation of equipment
and communications
infrastructure
• Establishment of
base-specific BCP drill
regulations
Reconfirmation of natural disaster risks and countermeasure
development
Improvement of BCP implementation procedures at the Komatsu
Group and business partners
• Improvement of BCP implementation procedures at individual bases
• Support for establishing BCP systems of business partners
BCP seminar for partner companies
Reinforcement of Information Security
Threats such as cyberattacks are constantly growing more sophisti-
taken to guarantee that personal information is properly handled.
cated and complex, increasing the importance of information secu-
These steps include e-learning programs and internal audits.
rity. Komatsu implements information security measures based on
Overseas, we comply with the European Union’s General Data
all applicable laws and regulations as well as internal rules.
Protection Regulation and other laws, regulations, and social
expectations in countries and regions of operation in our efforts
(1) Management System
to protect personal information.
Companywide information security issues are shared and examined
by the Risk Management Committee through a management system
(3) System Measures
overseen by the officer in charge of risk management. The president
Komatsu has instituted a multilevel defense system combined
of the Information Strategy Division, who is also the Company’s top
with various system measures to prevent unauthorized access
representative for ICT, co-chairs the Risk Management Committee to
from outside of the Company, computer virus infections, and
ensure that this committee is equipped to handle highly specialized
other threats as well as information leakages resulting from these
information security issues. Critical information security issues are
threats. For example, as part of the process of implementing
shared and resolved by this committee.
teleworking systems, we installed a rigorous verification system
Should a serious information security incident occur, swift
that employs a scheme in which multiple processes are required
reports will be issued to the president, directors, other officers,
to access systems from outside of the Company.
relevant organizations, and the Board of Directors to commence
the process of formulating appropriate response measures.
(4) Education and Training
The Information Strategy Division, meanwhile, proposes appro-
priate measures for addressing potential information security
risks. These proposals are raised at annual meetings of the
Strategy Review Committee, which comprises the president,
directors, and other officers, so that they can be incorporated
into medium-term ICT investment plans.
All employees engaged in the handling of information assets are
required to undergo regular e-learning programs. In addition, tar-
geted-attack email drills are held several times a year to entrench
procedures for addressing suspicious emails. These drills target
companies in Japan as well as certain overseas subsidiaries in
order to boost the level of information security on a global scale.
(2) Personal Information Protection
(5) Information Security Audits
Protecting personal information is a social responsibility.
Recognizing this responsibility, Komatsu has formulated and
disclosed its Personal Information Protection Policy. Steps are
Information security audits of Group companies are performed to
improve the level of information security across the entire Komatsu
Group. In principle, every company is required to undergo an audit
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at least once every three years as part of an effort to confirm infor-
Effective, ongoing support is provided for this purpose. Regular
mation security-related conditions on an ongoing basis.
meetings on the status of information security management are
held with applicable affiliates. When necessary, we may present
(6) Initiatives for Improving Information Security
items for operational information inspections of information
Across the Supply Chain
systems or recommend the use of certain information security
Our information security initiatives are not limited to Komatsu and
materials. We thereby aim to promote understanding of the
Group companies; we also request that affiliates across the
importance of appropriate information management among all
supply chain with which confidential information is shared during
parties that handle confidential information in order to reduce
the course of business activities practice information security
risks and better guarantee business continuity.
management in accordance with the Company’s policies.
Compliance
Komatsu established the “Compliance Committee” to oversee
Executive Officer in charge of compliance, and establishment of
compliance, and the Committee regularly reports its discussions
the Compliance Department. Through all of these measures, we
and activities to the Board of Directors. Komatsu also establishes
work to supervise, educate and train Directors, Audit & Supervisory
a system to ensure all Directors and employees thoroughly
Board Members and employees. In addition, Komatsu establishes
comply with business rules as well as laws and regulations through
an internal reporting system under which those who are discreetly
a variety of measures, including the provision of “Komatsu’s
reporting questionable actions in light of laws and regulations and
Worldwide Code of Business Conduct,” appointment of the
business rules will not be given any disadvantageous treatment.
Process for Compliance Activities
1. Declaration of stance by senior
management
Formulate the Code
Komatsu’s Worldwide Code of Business
Conduct
2. Implement the Code
3. Determine the Current Status
4. Reacting to Contingencies
Trainings
Compliance and risk audits
Accidents, incidents
Five Principles of Compliance
Monthly Newsletter
Internal reporting systems
Statement of Compliance
Compliance Portal
Visualization survey
(Interviews, online surveys)
Recurrence prevention measures
(1) Komatsu’s Worldwide Code of Business Conduct
Initially established in 1998, the Komatsu’s Worldwide Code of
(3) Upholding Thorough Compliance
• Five Principles of Compliance
Business Conduct is now in its 11th edition. The Part 1 of the Code
Komatsu is working to cultivate their consciousness of best busi-
primarily provides principles and standards for responsible business
ness practices by displaying posters at every business unit of
conduct that Komatsu Group follows in order to fulfill its social
Komatsu Group listing The Five Principles of Compliance (the basic
responsibilities such as solving ESG issues. Accompanied by exam-
actions of compliance that all Komatsu employees must observe).
ples, Part 2 contains select universally applicable rules which set the
code of conduct that must be followed by all employees of Komatsu.
Web
Please visit Komatsu website to see the Komatsu’s Worldwide Code of
Business Conduct including the Five Principles of Compliance and other topics.
https://www.komatsu.jp/en/-/media/home/aboutus/
corporate-identity/kwcbc_11th_en_extra.pdf?rev=425b
393b6d9145bab9897c332bfc8682&hash=8E43993D7E
9C66C7035018A90C1BD856
(2) Internal Reporting Systems
• Global E-Learning Program on Komatsu’s Worldwide Code of
Business Conduct
Global e-learning programs are conducted targeting all Komatsu
Group employees around the world in order to raise understand-
ing of the Komatsu’s Worldwide Code of Business Conduct.
Workers without company email addresses participate in these
programs in a classroom training format.
Komatsu has established the Global Compliance Hotline in its HQ
• Compliance Newsletter
to offer counselling to and handle reports from employees of
Komatsu publishes monthly newsletters “Everybody’s
Komatsu Group companies pertaining to the rules in the business
Compliance” in Japan that contains articles explaining important
world. In this way, we strive to detect and correct problems early. In
laws and regulations, highlighting the lessons to be learned from
addition, Komatsu companies establish and maintain Regional
scandals at other companies, and describing matters pertaining to
Compliance Hotline that properly handles reports of alleged or
human rights and the prevention of harassment. Articles on par-
suspected violation of the rules so that whistleblowers can raise
ticularly important subjects, such as anti-corruption, antitrust laws,
claims in their native languages.
and export control, are frequently republished in this newsletter.
Compliance newsletters are also published at overseas subsidiar-
ies in order to raise awareness on a global basis.
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A Century of Creating the Workplaces of the FutureTop Management’s Views on Komatsu’s Management Issues and Strategies for the Next CenturyEvolution of Business Model for Creating the Workplaces of the FutureResolution of ESG Issues through Growth StrategiesCorporate Profile Corporate Profile
Directors and Audit & Supervisory Board Members
Directors
Chairman of the Board
Representative Director
Tetsuji
Ohashi
Number of Year(s) in Office
12 years
Attendance of the Meetings of the Board of Directors 15/15 (100%)
Number of Shares of the Company Held
176 thousand shares
Important Concurrent Positions Held in Other Organizations:
Outside Director of Yamaha Motor Co., Ltd.
Outside Director of Nomura Research Institute, Ltd.
Special Interests Between the Candidate and the Company: None
4/1977
4/2019
Joined the Company
Took office as Chairperson of the Board and
Representative Director (current)
Director and Senior
Executive Officer
Masayuki
Moriyama
Number of Year(s) in Office
2 years
Attendance of the Meetings of the Board of Directors 15/15 (100%)
Number of Shares of the Company Held
64 thousand shares
Important Concurrent Positions Held in Other Organizations: None
None
Special Interests Between the Candidate and the Company:
4/1982
6/2019
Joined the Company
Took office as Director and Senior Executive Officer
(current)
President of Mining Business Division
NEW
Director and Senior
Executive Officer
Takeshi
Horikoshi
Number of Shares of the Company Held
24 thousand shares
Important Concurrent Positions Held in Other Organizations: None
None
Special Interests Between the Candidate and the Company:
4/1985
6/2021
Joined the Company
Took office as Director and Managing Executive
Officer (current)
CFO
Number of Year(s) in Office
5 years
Attendance of the Meetings of the Board of Directors 15/15 (100%)
Number of Shares of the Company Held
None
Important Concurrent Positions Held in Other Organizations:
Special Advisor of Yamato Holdings Co., Ltd.
Outside Director of Seven Bank, Ltd.
Outside Director of Oki Electric Industry Co., Ltd.
Outside Audit & Supervisory Board Member of The Higo Bank, Ltd.
None
Special Interests Between the Candidate and the Company:
Outside Director
Makoto Kigawa
Number of Year(s) in Office
1 year
Attendance of the Meetings of the Board of Directors 11/11 (100%)
Number of Shares of the Company Held
None
Important Concurrent Positions Held in Other Organizations:
Chairman of the Board of Sumitomo Mitsui Financial Group, Inc.
Outside Member of the Board of TAISHO
PHARMACEUTICAL HOLDINGS CO., LTD.
Outside Auditor of Nankai Electric Railway Co., Ltd.
None
Special Interests Between the Candidate and the Company:
Outside Director
Takeshi Kunibe
Number of Year(s) in Office
3 years
Attendance of the Meetings of the Board of Directors 15/15 (100%)
Number of Shares of the Company Held
77 thousand shares
Important Concurrent Positions Held in Other Organizations: None
Special Interests Between the Candidate and the Company: None
4/1985
4/2019
Joined the Company
Took office as President and Representative Director
(current) CEO (current)
President and CEO
Representative Director
Hiroyuki
Ogawa
Director and Senior
Executive Officer
Kiyoshi
Mizuhara
Number of Year(s) in Office
2 years
Attendance of the Meetings of the Board of Directors 15/15 (100%)
Number of Shares of the Company Held
44 thousand shares
Important Concurrent Positions Held in Other Organizations: None
None
Special Interests Between the Candidate and the Company:
4/1983
6/2019
Joined the Company
Took office as Director and Senior Executive Officer
(current)
CMO and President, Construction Equipment
Solution Division
6/2006
3/2007
4/2011
4/2015
6/2016
4/2018
Took office as Representative Director and Senior Managing
Executive Officer of Yamato Holdings Co., Ltd.
Took office as Representative Director and Executive Officer
of Yamato Holdings Co., Ltd.
Took office as Representative Director, President and
Executive Officer of Yamato Transport Co., Ltd.
Took office as Representative Director, President and
Executive Officer of Yamato Holdings Co., Ltd.
Took office as Chairman of the Board and Representative
Director of Yamato Holdings Co., Ltd.
Took office as Director of the Company (current)
Took office as Director and Chairman of Yamato Holdings
Co., Ltd.
6/2019 Special Advisor of Yamato Holdings Co., Ltd. (current)
6/2017
Took office as Director President and Representative
Executive Officer of SMFG
4/2019 Took office as Chairman of the Board of SMFG (current)
6/2020
Took office as Outside Director (current)
4/1973
4/2004
Joined The Fuji Bank, Limited (currently Mizuho Bank, Ltd.)
Took office as Managing Director, Chief Risk Officer/Head of
Risk Management Group, and Chief Human Resources
Officer/Head of Human Resources Group of Mizuho
Corporate Bank, Ltd. (currently Mizuho Bank, Ltd.)
3/2005 Retired from Mizuho Corporate Bank, Ltd.
4/2005
6/2005
11/2005
4/2006
Joined Yamato Transport Co., Ltd. (currently Yamato
Holdings Co., Ltd.)
Took office as Managing Director of Yamato Transport Co.,
Ltd. (currently Yamato Holdings Co., Ltd.)
Took office as Representative Managing Director of Yamato
Holdings Co., Ltd.
Took office as Representative Director and Managing
Executive Officer of Yamato Holdings Co., Ltd.
4/1976
Joined The Sumitomo Bank, Ltd. (currently Sumitomo Mitsui
Banking Corporation, hereinafter “SMBC”)
6/2003 Took office as Executive Officer of SMBC
10/2006 Took office as Managing Executive Officer of SMBC
4/2007
6/2007
4/2009
4/2011
4/2017
Took office as Managing Executive Officer of Sumitomo
Mitsui Financial Group, Inc. (hereinafter “SMFG”)
Took office as Director of SMFG
Took office as Director and Senior Managing Executive
Officer of SMBC
Took office as Representative Director, President and Chief
Executive Officer of SMBC
Took office as Representative Director and President of
SMFG
Retired from Director of SMBC
Outside Director
Arthur M.
Mitchell
Number of Year(s) in Office
1 year
Attendance of the Meetings of the Board of Directors 11/11 (100%)
Number of Shares of the Company Held
None
Important Concurrent Positions Held in Other Organizations:
Foreign lawyer of White & Case LLP
Outside Director of Sumitomo Mitsui Financial Group, Inc.
None
Special Interests Between the Candidate and the Company:
7/1976
1/2003
9/2007
1/2008
6/2020
Registered as attorney at law in New York State, USA
(current)
Took office as General Counsel of Asian Development Bank
Joined White & Case LLP
Registered as registered foreign lawyer in Japan (current)
Registered foreign lawyer of White & Case LLP (current)
Took office as Outside Director (current)
NEW
Outside Director
Naoko
Saiki
Number of Shares of the Company Held
None
Important Concurrent Positions Held in Other Organizations:
Visiting Professor, Graduate School of Public Policy, The University
of Tokyo
Outside Director, Sojitz Corporation
Outside Audit & Supervisory Board Member, Development Bank of
Japan Inc.
None
Special Interests Between the Candidate and the Company:
10/2015
4/1982 Joined the Ministry of Foreign Affairs (hereinafter “MOFA”)
Took office as Director-General, Economic Affairs Bureau
7/2014
and Councillor, Cabinet Secretariat
Took office as Director-General, International Legal Affairs
Bureau
Took office as Director-General, Foreign Service Training
Institute, MOFA
7/2017
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1/2019 Retired from MOFA
4/2020
Took office as Visiting Professor, Graduate School of Public
Policy, The University of Tokyo (current)
6/2021 Took office as Director of the Company (current)
(As of June 30, 2021)
Komatsu’s Independence Standards for Outside Directors and Outside Audit & Supervisory Board Members can be found via the link below.
Web
https://www.komatsu.jp/en/ir/corporate-governance/independence-criterion-standards
Audit & Supervisory Board Members
Standing Audit &
Supervisory Board
Member
Terumi Sasaki
Outside Audit &
Supervisory Board
Member
Hirohide
Yamaguchi
Number of Shares of the Company Held
21 thousand shares
Important Concurrent Positions Held in Other Organizations: None
None
Special Interests Between the Candidate and the Company:
4/1983 Joined the Company
6/2020
Took office as Standing Audit & Supervisory Board Member
(current)
Number of Shares of the Company Held
Important Concurrent Positions Held in Other Organizations:
None
Chairman of the Advisory Board of Nikko Financial Intelligence, Inc.
(currently Nikko Research Center, Inc.)
Outside Audit & Supervisory Board Member of Mitsui Fudosan
Residential Co., Ltd.
Special Interests Between the Candidate and the Company: None
Joined the Bank of Japan
Took office as Deputy Governor of Bank of Japan
4/1974
10/2008
3/2013 Retired from Bank of Japan
7/2013
Took office as Chairman of the Advisory Board of Nikko
Financial Intelligence, Inc. (currently Nikko Research Center,
Inc.) (current)
Took office as Audit & Supervisory Board Member of the
Company (current)
6/2014
NEW
Number of Shares of the Company Held
49 thousand shares
Important Concurrent Positions Held in Other Organizations: None
None
Special Interests Between the Candidate and the Company:
4/1984 Joined the Company
6/2021
Took office as Standing Audit & Supervisory Board Member
(current)
Number of Shares of the Company Held
Important Concurrent Positions Held in Other Organizations:
None
Special Interests Between the Candidate and the Company:
Professor emeritus at Ochanomizu University
None
4/1993
4/2008
6/2015
Took office as Professor at Ochanomizu University
Took office as Professor Emeritus at Ochanomizu University
(current)
Took office as Audit & Supervisory Board Member of the
Company (current)
Standing Audit &
Supervisory Board
Member
Yasuhiro
Inagaki
Outside Audit &
Supervisory Board
Member
Eiko
Shinotsuka
Outside Audit &
Supervisory Board
Member
Kotaro Ohno
Number of Shares of the Company Held
Important Concurrent Positions Held in Other Organizations:
None
Attorney at law, Special Counsel of Mori Hamada & Matsumoto
Outside Director of AEON Co., Ltd.
Special Interests Between the Candidate and the Company: None
4/1976
7/2009
7/2012 Took office as Superintending Prosecutor of Tokyo High
Appointed as Prosecutor
Took office as Vice-Minister of Justice
Public Prosecutors Office
7/2014 Took office as Prosecutor-General of Supreme Public
Prosecutors Office
9/2016 Retired from the position of Prosecutor-General of Supreme Public Prosecutors Office
11/2016
6/2017 Took office as Audit & Supervisory Board Member of the Company (current)
Attorney at law, Special Counsel of Mori Hamada & Matsumoto (current)
(As of June 30, 2021)
Skill Matrix for Outside Directors and Outside Audit & Supervisory Board Members of the Company
Name
Corporate
Management
Finance/
Economics
Sales &
Marketing
Human Rights/
Human
Resources &
Human
Resource
Development
Environment
Legal Affairs &
Compliance
Global
Risk
Management
Outside
Director
●
●
Makoto Kigawa
Takeshi Kunibe
Arthur M. Mitchell
Naoko Saiki
Outside
Audit &
Supervisory
Board
Member
Hirohide Yamaguchi
Eiko Shinotsuka
Kotaro Ohno
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
Note: The skill matrix above is not an exhaustive list of all the expertise, experience and knowledge possessed by Outside Directors and Outside Audit & Supervisory Board
Members of the Company, but presents the fields that the Company wishes each Outside Director and Outside Audit & Supervisory Board Member to focus on in
particular for the supervision of management.
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A Century of Creating the Workplaces of the FutureTop Management’s Views on Komatsu’s Management Issues and Strategies for the Next CenturyEvolution of Business Model for Creating the Workplaces of the FutureResolution of ESG Issues through Growth StrategiesCorporate Profile
Corporate Profile
Directors and Audit & Supervisory Board Members
Executive Officers
Senior Executive Officer
(Senmu)
Executive Officers
Chief Technology Officer (CTO)
Supervising Research & Development
Yuichi Iwamoto
GM, Business Reform Department,
President, Service Division,
Construction Equipment Marketing Division
Construction Equipment Solution Division
GM, Business Process Reform Department
Keiko Fujiwara
Toru Sunada
Osaka Plant Manager, Production Division
President, Smart Construction Promotion Division
GM, Manufacturing Engineering Development
Senior Executive Officers
(Jomu)
Chikashi Shike
Vice President, Production Division
Center, Production Division
Takayuki Furukoshi
President, Production Division
President, Procurement Division, Production Division
Supervising Industrial Machinery Business
Chairman of the Board, Komatsu NTC Ltd.
Masaki Nobuhara
President, Development Division
Seiichi Fuchita
President, Japanese Domestic Marketing,
Construction Equipment Marketing Division
Kazuaki Miura
GM, Business Coordination Department
GM, Komatsu Economic Strategy Research Center
Masatoshi Morishita
President, Parts & Reman Promotion Division,
President, Aftermarket Business Division,
Production Division
Yasuo Suzuki
Construction Equipment Marketing Division
Kenichi Sato
President, Quality Assurance Division
Vice President, Development Division
Masami Naruse
Jun Taniguchi
Awazu Plant Manager, Production Division
Ibaraki Plant Manager, Production Division
Takashi Yasukawa
Naoyuki Sakurai
President, Product Marketing Division
President, Defense Systems Division
Kosei Okamoto
Hiroaki Ohno
President, Information Strategy Division
Vice President, Japanese Domestic Marketing,
Shinji Maeda
Construction Equipment Marketing Division
President, Komatsu Customer Support Japan Ltd.
Himi Plant Manager, Production Division
Hideki Yoshizawa
President, Construction Equipment Marketing Division
Norikatsu Nishiyama
Oyama Plant Manager, Production Division
Hidefumi Obikane
Korekiyo Yanagisawa
GM, Human Resources Department
Supervising Education
Koichi Honda
President, Sustainability Promotion Division
Mitsuko Yokomoto
Supervising Legal, General Affairs & Compliance
Hiroshi Makabe
Vice President, Development Division
GM, Vehicle Development Center 2
Development Division
Terumasa Imajo
Vice President, Development Division
GM, Engine Technical Center,
Development Division
President, Industrial Power Alliance Ltd.
Masaki Shinohara
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Executive Officers (Global) Note: Executive officers overseas concurrently serve as global officers.
North America
South America
China
Senior Executive Officers
Senior Executive Officer
Senior Executive Officer
Chairman & CEO, Komatsu America Corp.
Representative of All Latin America* Operations
Representative of All China Operations
President, Komatsu Cummins Chile Ltda. President,
Chairman, Komatsu (China) Ltd.
Rodney Schrader
President & CEO, Komatsu Mining Corp.
Vice President, Mining Business Division
Jeffrey Dawes
Komatsu Holding South America Ltda. *"Latin America”
does not include Brazil.
Yasuji Nishiura
Technical Director, Modular Mining Systems, Inc.
Vice President, Mining Business Division
Europe
Ichiro Nakano
Executive Officers
Takuya Imayoshi
Executive Officer
President & CEO, Komatsu (China) Ltd.
Quanwang Zhang
President and CEO, Komatsu Europe International N.V.
Africa
Executive Officers
Tadashi Maeda
President & COO, Komatsu America Corp.
President, Komatsu Forest AB
Taisuke Kusaba
Hiroyuki Umeda
Executive Vice President and President,
North America R&D Division, Komatsu America Corp.
Technical Director, Komatsu Mining Corp.
Asia/Oceania
Yuushi Oshikawa
Executive Officers
Executive Vice President. CFO, Komatsu America Corp.
President, PT Komatsu Indonesia
Gary Kasbeer
Pratjojo Dewo S.
Executive Vice President & COO, Komatsu Mining Corp.
Managing Director, Komatsu Australia Pty. Ltd.
Nozomu Okamoto
Sean Taylor
Executive Officer
President & MD, Komatsu South Africa (Pty) Ltd.
Michael Blom
Global Officers
North America
Europe
Asia/Oceania
President, Underground and Hard Rock Mining,
Chief Operating Officer,
President, Bangkok Komatsu Co., Ltd.
Komatsu Mining Corp.
Peter Salditt
Komatsu Europe International N.V.
Göksel Güner
Charoen Ruengwilai
President, Surface Mining, Komatsu Mining Corp.
President & MD, Komatsu UK Ltd.
John Koetz
Paul Blanchard
China
President & CEO, Modular Mining Systems, Inc.
President and MD, Komatsu Germany GmbH
Jorge Mascena
Ralf Petzold
President, Komatsu (Shandong) Construction
Machinery Corp.
Fangchang Liu
President, Hensley Industries, Inc.
John Fiedler
Executive Vice President and President, Construction
Division, Komatsu Germany GmbH
President, Komatsu Shantui Construction Machinery
Co., Ltd.
Ingo Büscher
Dechun Tian
President & MD, Komatsu Italia Manufacturing S.p.A.
David Bazzi
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A Century of Creating the Workplaces of the FutureTop Management’s Views on Komatsu’s Management Issues and Strategies for the Next CenturyEvolution of Business Model for Creating the Workplaces of the FutureResolution of ESG Issues through Growth StrategiesCorporate Profile Corporate Profile
11-Year Summary
Net sales
Operating income
FY2010
FY2011
FY2012
FY2013
FY2014
FY2015
FY2016
FY2017
FY2018
FY2019
FY2020
1,843,127
1,981,763
1,884,991
1,953,657
1,978,676
1,854,964
1,802,989
2,501,107
2,725,243
2,444,870
2,189,512
222,929
256,343
211,602
240,495
242,062
208,577
174,097
268,503
397,806
250,707
167,328
Operating income ratio (%)
12.1
12.9
11.2
12.3
12.2
11.2
9.7
10.7
14.6
10.3
Income from continuing operations before income
taxes and equity in earnings of affiliated companies
Net income attributable to Komatsu Ltd.
Capital investment
Depreciation and amortization*1
Research and development expenses
219,809
249,609
204,603
242,056
236,074
204,881
166,469
291,807
377,471
223,114
150,752
97,738
88,442
49,005
167,041
122,038
89,015
54,843
126,321
136,962
88,005
60,788
159,518
179,070
85,837
64,479
154,009
192,724
100,666
70,715
137,426
160,051
111,174
70,736
113,381
142,006
103,219
70,507
196,410
145,668
132,442
73,625
256,491
179,210
129,860
73,447
153,844
166,552
129,525
74,761
Total assets
Shareholders’ equity
Shareholders’ equity ratio (%)
Net interest-bearing debt*2
Net debt-equity ratio (times)
2,149,137
2,320,529
2,517,857
2,651,556
2,798,407
2,614,654
2,656,482
3,372,538
3,638,219
3,653,686
3,784,841
923,843
1,009,696
1,193,194
1,376,391
1,528,966
1,517,414
1,576,674
1,664,540
1,815,582
1,771,606
1,912,297
43.0
43.5
47.4
51.9
54.6
58.0
59.4
49.4
49.9
48.5
459,110
563,814
585,926
513,918
481,817
349,081
286,512
663,740
779,890
762,705
0.50
0.56
0.49
0.37
0.32
0.23
0.18
0.40
0.43
0.43
Net cash provided by operating activities
150,402
105,608
214,045
319,424
343,654
319,634
256,126
148,394
202,548
295,181
Net cash used in investing activities
(88,509)
(124,539)
(131,397)
(167,439)
(181,793)
(148,642)
(133,299)
(377,745)
(187,204)
(190,930)
Net cash provided by (used in) financing activities
Cash and cash equivalents, end of year
(56,365)
84,224
18,781
83,079
(71,814)
(155,349)
(143,983)
(173,079)
(107,718)
243,949
(3,660)
(3,457)
93,620
90,872
105,905
106,259
119,901
144,397
148,479
247,616
Number of common shares issued (thousands of shares)
998,744
983,130
983,130
983,130
971,967
971,967
971,967
971,967
972,252
972,581
Net income attributable to Komatsu Ltd. per share (yen)
155.77
173.47
132.64
167.36
162.07
145.80
120.26
208.25
271.81
162.93
Cash dividends per share (yen)
Consolidated payout ratio (%)
ROA (%)
ROE (%)
Exchange rate for the U.S. dollar (yen)*3
Exchange rate for the euro (yen)*3
Exchange rate for the Chinese renminbi (yen)*3
Number of employees (persons)
Overseas employee ratio (%)
CO2 emissions (thousand t)*4
Waste generated (thousand t)*4
Volume of water used (thousand m3)*4
38.0
24.4
10.7
17.2
85
113
12.7
42.0
24.2
11.2
17.3
79
110
12.4
48.0
36.2
8.5
11.5
83
107
13.2
58.0
34.7
9.4
12.4
100
133
16.3
41,059
44,206
46,730
47,208
47,417
47,017
47,204
59,632
61,908
62,823
61,564
55.5
547
111.1
7,400
57.5
583
119.5
6,784
64.3
468
112.1
5,737
61.8
458
101.4
5,114
58.0
35.8
8.7
10.6
110
140
17.7
61.0
412
83.2
58.0
39.8
7.6
9.0
121
132
19.0
60.7
342
62.4
58.0
48.2
6.3
7.3
109
119
16.2
62.7
384
83.5
4,270
3,632
3,362
84.0
40.3
9.7
12.1
111
130
16.8
66.7
459
113.1
4,029
110.0
40.5
10.8
14.7
111
129
16.5
68.4
519
117.8
3,954
94.0
57.7
6.1
8.6
109
121
15.6
68.4
404
95.6
3,564
*1 Depreciation is the total of depreciation on property, plant and equipment and on intangible assets.
*2 Net interest-bearing debt = Interest-bearing debt – Cash and equivalents – Time deposits
*3 Average exchange rates for the fiscal year
*4 Certain data has been revised and restated
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Millions of yen
7.6
162,775
106,237
163,174
130,432
73,840
50.5
666,856
0.35
354,129
(163,057)
(199,667)
241,803
972,887
112.43
55.0
48.9
4.4
5.8
106
123
15.6
67.5
382
74.2
3,231
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Net sales
Operating income
Income from continuing operations before income
taxes and equity in earnings of affiliated companies
Net income attributable to Komatsu Ltd.
Capital investment
Depreciation and amortization*1
Research and development expenses
Total assets
Shareholders’ equity
Shareholders’ equity ratio (%)
Net interest-bearing debt*2
Net debt-equity ratio (times)
FY2010
FY2011
FY2012
FY2013
FY2014
FY2015
FY2016
FY2017
FY2018
FY2019
FY2020
1,843,127
1,981,763
1,884,991
1,953,657
1,978,676
1,854,964
1,802,989
2,501,107
2,725,243
2,444,870
2,189,512
222,929
256,343
211,602
240,495
242,062
208,577
174,097
268,503
397,806
250,707
167,328
Millions of yen
Operating income ratio (%)
12.1
12.9
11.2
12.3
12.2
11.2
9.7
10.7
14.6
10.3
219,809
249,609
204,603
242,056
236,074
204,881
166,469
291,807
377,471
223,114
150,752
97,738
88,442
49,005
167,041
122,038
89,015
54,843
126,321
136,962
88,005
60,788
159,518
179,070
85,837
64,479
154,009
192,724
100,666
70,715
137,426
160,051
111,174
70,736
113,381
142,006
103,219
70,507
196,410
145,668
132,442
73,625
256,491
179,210
129,860
73,447
153,844
166,552
129,525
74,761
7.6
162,775
106,237
163,174
130,432
73,840
2,149,137
2,320,529
2,517,857
2,651,556
2,798,407
2,614,654
2,656,482
3,372,538
3,638,219
3,653,686
3,784,841
923,843
1,009,696
1,193,194
1,376,391
1,528,966
1,517,414
1,576,674
1,664,540
1,815,582
1,771,606
1,912,297
43.0
43.5
47.4
51.9
54.6
58.0
59.4
49.4
49.9
48.5
459,110
563,814
585,926
513,918
481,817
349,081
286,512
663,740
779,890
762,705
0.50
0.56
0.49
0.37
0.32
0.23
0.18
0.40
0.43
0.43
Net cash provided by operating activities
150,402
105,608
214,045
319,424
343,654
319,634
256,126
148,394
202,548
295,181
Net cash used in investing activities
(88,509)
(124,539)
(131,397)
(167,439)
(181,793)
(148,642)
(133,299)
(377,745)
(187,204)
(190,930)
Net cash provided by (used in) financing activities
(71,814)
(155,349)
(143,983)
(173,079)
(107,718)
243,949
(3,660)
(3,457)
Cash and cash equivalents, end of year
93,620
90,872
105,905
106,259
119,901
144,397
148,479
247,616
(56,365)
84,224
18,781
83,079
Number of common shares issued (thousands of shares)
998,744
983,130
983,130
983,130
971,967
971,967
971,967
971,967
972,252
972,581
Net income attributable to Komatsu Ltd. per share (yen)
155.77
173.47
132.64
167.36
162.07
145.80
120.26
208.25
271.81
162.93
58.0
35.8
8.7
10.6
110
140
17.7
58.0
39.8
7.6
9.0
121
132
19.0
58.0
48.2
6.3
7.3
109
119
16.2
84.0
40.3
9.7
12.1
111
130
16.8
110.0
40.5
10.8
14.7
111
129
16.5
94.0
57.7
6.1
8.6
109
121
15.6
50.5
666,856
0.35
354,129
(163,057)
(199,667)
241,803
972,887
112.43
55.0
48.9
4.4
5.8
106
123
15.6
41,059
44,206
46,730
47,208
47,417
47,017
47,204
59,632
61,908
62,823
61,564
61.0
412
83.2
60.7
342
62.4
62.7
384
83.5
4,270
3,632
3,362
66.7
459
113.1
4,029
68.4
519
117.8
3,954
68.4
404
95.6
3,564
67.5
382
74.2
3,231
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Cash dividends per share (yen)
Consolidated payout ratio (%)
ROA (%)
ROE (%)
Exchange rate for the U.S. dollar (yen)*3
Exchange rate for the euro (yen)*3
Exchange rate for the Chinese renminbi (yen)*3
Number of employees (persons)
Overseas employee ratio (%)
CO2 emissions (thousand t)*4
Waste generated (thousand t)*4
Volume of water used (thousand m3)*4
38.0
24.4
10.7
17.2
85
113
12.7
55.5
547
111.1
7,400
42.0
24.2
11.2
17.3
79
110
12.4
57.5
583
119.5
6,784
48.0
36.2
8.5
11.5
83
107
13.2
64.3
468
112.1
5,737
58.0
34.7
9.4
12.4
100
133
16.3
61.8
458
101.4
5,114
*1 Depreciation is the total of depreciation on property, plant and equipment and on intangible assets.
*2 Net interest-bearing debt = Interest-bearing debt – Cash and equivalents – Time deposits
*3 Average exchange rates for the fiscal year
*4 Certain data has been revised and restated
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Corporate Profile
Non-Financial Highlights
Reduction of CO2 Emissions from Product
Operation
In the mid-term management plan (FY2019–FY2021), Komatsu
has set the target of reducing CO2 emissions from the opera-
tion of products (construction, mining, and forest equipment) by
50% by 2030 (compared to 2010).
To evaluate progress toward this goal, we compared the
performance of the current year’s products to the products of
the reference year (2010) and estimated CO2 reduction rates
through the improvement of fuel consumption and work effi-
ciency. The products of 2020 achieved a CO2 reduction of 14%,
compared to the reference year.
CO2 Emissions Index for Product Operation
100
100
88
86
86
80
60
40
20
0
Target
50
2010
2018
2019
2020
2030
Changes in Reman Sales (Base FY2004 = 100)
(Frequency Rate of Lost Work Time)
Incidence Rate of Occupational Accidents
(%)
500
400
300
200
100
0
451
402
414
355
349
304
313
270
250
239
200
160 168
156
137
112
100
(Frequency rate)
2.0
1.5
1.0
0.5
0.0
1.63
1.66
0.73
0.72
0.45
0.31
0.75
0.76
0.47
0.38
1.83
1.44
0.56
0.44
0.20
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
(FY)
2016
2017
2018
1.80
0.88
0.65
0.28
0.16
2019
1.95
1.29
0.73
0.37
0.31
2020
(FY)
All industries (Japan)
Construction and mining equipment manufacturing industry (Japan)
Komatsu Group (Japan and Global) Komatsu Group (Japan)
Komatsu (Non-consolidated)
Notes: 1. The data for all industries (Japan) and construction and mining equipment
manufacturing industry (Japan) is provided by the Ministry of Health, Labour and
Welfare.
2. The scope of Komatsu Group (Japan) includes Komatsu Ltd. and Group compa-
nies in Japan.
3. The scope of Komatsu Group (global) includes “Komatsu Group (Japan)” and
overseas production plants.
4. Certain data has been revised and restated.
Numbers and Ratios of Female Employees and Female Managers
(People)
1,600
1,200
800
400
0
1,463
1,482
1,486
12.3
11.4
9.1
12.3
11.4
9.5
12.4
10.6
9.4
302
172
315
178
324
179
(%)
16
12
8
4
0
(FY)
Number of Global Officers
(People)
26
18
29
27
19
19
32
24
16
8
0
2019
2020
2021
(FY)
2019
2020
2021
■ Total ■ National top managers out of total executive officers
Data is as of April 1 of each fiscal year.
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■ Number of female employees ■ Number of women junior managers
■ Number of women in management and executive positions (*including junior managers)
Ratio of female employees (right scale) Ratio of women junior managers
Ratio of women in management and executive positions (right scale) (*including junior managers)
Note: Data is as of April 1, 2021, and for Komatsu Ltd. (Japan) on a non-consolidated basis.
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Corporate Profile
External Evaluations and Index Inclusion
For more information on the above indexes, please refer to Komatsu’s corporate website:
Web
https://komatsu.disclosure.site/en/themes/133
CDP Climate A-List
CDP Water A-List
Dow Jones Sustainability
Indices (DJSI)
MSCI Global
Sustainability Indexes*1
ISS-Oekom
Euronext Vigeo World 120
FTSE Blossom Japan Index*2
MSCI Japan
ESG Select Leaders Index*1
MSCI Japan
Empowering Women Index*1
S&P/JPX
Carbon Efficient Index
Digital Transformation
Stock Selection
SBT
Grand Prix of the Corporate Value
Improvement Award,
Tokyo Stock Exchange
*1 The inclusion of Komatsu ltd in any MSCI index, and the use of MSCI logos, trademarks, service marks or index names HEREIN, do not constitute a sponsorship, endorsement or promotion of Komatsu ltd by MSCI or any of its
affiliates. The MSCI indexes are the exclusive property of MSCI. MSCI and the MSCI index names and logos are trademarks or service marks of MSCI or its affiliates.
*2 FTSE Russell confirms that Komatsu has been independently assessed according to the index criteria, and has satisfied the requirements to become a constituent of the FTSE Blossom Japan Index. Created by the global index
and data provider FTSE Russell, the FTSE Blossom Japan Index is designed to measure the performance of companies demonstrating strong Environmental, Social and Governance (ESG) practices. The FTSE Blossom Japan Index
is used by a wide variety of market participants to create and assess responsible investment funds and other products.
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Corporate Information (As of March 31, 2021)
Name
Komatsu Ltd.
Head Office
Number of Employees
Consolidated: 61,564
Non-consolidated: 11,795
Transfer Agent for Common
Stock/Management Institution
for Special Account
2-3-6 Akasaka, Minato-ku, Tokyo 107-8414
Average age (non-consolidated): 39.8
Mitsubishi UFJ Trust and Banking
Average years of continuous service
Corporation
Date of Establishment
(non-consolidated): 15.3
4-5, Marunouchi 1-chome, Chiyoda-ku,
May 13, 1921
Common Stock Outstanding
Consolidated: ¥69,037 million based on
U.S. GAAP
Shares of Common Stock Issued
and Outstanding
972,887,610 shares
(including shares of treasury stock)
Number of Shareholders
184,661
Number of Shares per Trading
Unit
Tokyo 100-8212, Japan
Depositaries (ADRs)
The Bank of New York Mellon
101 Barclay Street,
New York, NY 10286, U.S.A.
Tel: +1-(201)-680-6825 for international
calls and 888-269-2377 (888-BNY-ADRS)
for calls within U.S.A.
URL: https://www.adrbnymellon.com/
Ticker Symbol: KMTUY
100
Securities Code
6301 (Japan)
Stock Listings
Tokyo
Major Shareholders
Number of shares held
(Thousands of shares)
Shareholding ratio
(%)
The Master Trust Bank of Japan, Ltd. (Trust Account)
Custody Bank of Japan, Ltd. (Trust Account)
SSBTC CLIENT OMNIBUS ACCOUNT
(standing proxy: The Hongkong and Shanghai Banking Corporation Limited, Tokyo branch)
JP MORGAN CHASE BANK 385632
(standing proxy: Mizuho Bank, Ltd., Settlement & Clearing Services Division)
Taiyo Life Insurance Company
Nippon Life Insurance Company (standing proxy: The Master Trust Bank of Japan, Ltd.)
THE BANK OF NEW YORK MELLON AS DEPOSITARY BANK FOR DEPOSITARY RECEIPT HOLDERS
(standing proxy: Sumitomo Mitsui Banking Corporation)
Custody Bank of Japan, Ltd. (Trust Account 7)
Custody Bank of Japan, Ltd. (Trust Account 5)
STATE STREET BANK WEST CLIENT - TREATY 505234
(standing proxy: Mizuho Bank, Ltd., Settlement & Clearing Services Division)
Notes: 1. Shareholding ratio is calculated by subtracting treasury stock.
2. Although the Company holds 27,319 thousand shares of treasury stock, it is excluded from the major shareholders listed above.
86,574
56,175
30,574
27,433
27,200
26,626
25,644
19,748
13,890
13,542
Stock Information (including shares of treasury stock)
9.15
5.94
3.23
2.90
2.87
2.81
2.71
2.08
1.46
1.43
Breakdown of
Shareholders
(%)
● Financial ................................ 35.0%
● Foreign ................................... 42.5%
● Individual and other ........ 17.3%
● Corporate ................................ 1.9%
● Securities ................................ 3.1%
340,609,230 shares
176 shareholders
414,201,239 shares
1,074 shareholders
168,315,982 shares 181,862 shareholders
19,375,538 shares
1,404 shareholders
30,385,621 shares
145 shareholders
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About Komatsu Report
We have published our integrated report, Komatsu Report, for our stakeholders to introduce the group's efforts to realize sustainable
growth in corporate value. The Komatsu Report mainly focuses on the value creation business model of working for sustainable growth
by turning a positive cycle of improving earnings (financial indexes) and solving ESG issues (non-financial indexes) as it implements
growth strategies in the mid-term management plan. Separate reports are prepared and disclosed to provide detailed financial informa-
tion and information on environmental and social initiatives.
Structure of Komatsu’s Annual Reports
Komatsu Report (Integrated Report)
Annual Securities Report
(Financial conditions)
ESG Databook
(Social activities and Environmental performance)
* Komatsu Report, Annual Securities Report and ESG Databook, in both Japanese and English, are uploaded on Komatsu’s website.
* Komatsu Ltd. issues the Komatsu Report only on the website.
Please refer to “Annual Securities Report” for more
Please refer to “ESG Databook” for more information
company and financial information.
concerning environmental and social efforts.
• Overview of the Company and Its Consolidated
• Stance on CSR Efforts
Subsidiaries
• Business Overview
• Property, Plant and Equipment
• Information on the Company
• Financial Information
• Theme 1: Enhancing Quality of Life
(Safety, environmental indexes, etc.)
• Theme 2: Developing People (Diversity, etc.)
• Theme 3: Growing with Society
(Compliance, risk management, governance, etc.)
Web
https://www.komatsu.jp/en/ir/library/
annual-security-report
Web
https://www.komatsu.jp/en/aboutus/csr
Komatsu has signed the United Nations Global Compact (UNGC).
Click this link for more information about the Ten Principles advo-
cated by the UNGC and how they pertain to Komatsu’s initiatives.
https://komatsu.disclosure.site/en/themes/129
Komatsu has joined the World Business Council for
Sustainable Development (WBCSD).
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A Century of Creating the Workplaces of the FutureTop Management’s Views on Komatsu’s Management Issues and Strategies for the Next CenturyEvolution of Business Model for Creating the Workplaces of the FutureResolution of ESG Issues through Growth StrategiesCorporate Profile 2-3-6, Akasaka, Minato-ku, Tokyo
107-8414, Japan
https://www.komatsu.jp/en
Corporate Communications Department
Sustainability Promotion Division
e-mail: JP00MB_info@global.komatsu