Business Result for the First Quarter ended June 3, 21 Regional Market Environments and Projections July 28, 21 Hitachi Construction Machinery Co., Ltd. Senior Vice President and Executive Officer Akihiko Hiraoka Hitachi Construction Machinery Co., Ltd. 21. All rights reserved.
Global Demand Trend for Hydraulic Excavators 1 2 2 22 2 17 1 12 1 7 2 *Excluding Chinese manufacturer (Distributing, copying, or forwarding prohibited) (K Units) 221 36 29 47 24 2 33 161 23 44 17 26 2 11 32 1 29 73 1 1 23 28 4 111 13 23 1 14 22 38 48 7 19 27 23 22 39 44 42 24 2 28 211 34 36 24 27 4 183 33 32 3 26 31 17 29 34 23 162 28 32 18 26 26 3 3 31 27 27 '7 '8 '9 '1 '11 '12 '13 '14 '1 '1 Emerging Countries 21:48% (Y--Y Change:-3%) *Emerging Countries: China, Asia/Oceania, and others Previous Outlook Present Outlook Total Others Asia Oceania *Incl. India China North America Western Europe Japan Year-on-Year Change '14 '1 Previous Outlook '1 Present Outlook Total -13% -7% -11% Russia, CIS, E Europe -22% -22% -37% Africa +7% +% % Middle East +9% -7% -7% Latin America -7% -14% -14% Others -3% -12% -1% India -1% +13% +13% Indonesia -2% -1% -2% Others -11% +4% +2% Asia & Oceania China N America W Europe Japan -11% +6% +% -4% -22% -39% +8% +% % +1% -3% -3% -23% -13% -13%
FY1/1Q FY1/1Q FY1/1Q FY1/1Q FY1/1Q FY1/1Q FY1/1Q FY1/1Q <Japan> Despite a recovery in housing starts, public investment reduced continuously. Demand for hydraulic excavators has decreased as a reaction to last minute demands in anticipation of new emission regulations (fell by 2% y-o-y). Demands for mini-excavators and wheel loaders have increased due to last minute demands anticipating new emission regulations (mini-excavators increased by 1% y-o-y; wheel loaders increased by 26% y-o-y). 2 3 4% 2% Market Environment: Housing/Public Spending and Capex (y-o-y) New housing starts (number of houses) *Source: MLIT, Cabinet Office, and Construction Surety Company (K units) 2 1 Demand Trend for Mini Excavators 1% 1% % % 1 % -2% -4% Public spending (Public work orders) Capex (Orders for machinery, excluding foreign demands) -% -1% -1% Demand Trend for Hydraulic Excavators (K units) (K units) 2 1% 2 1% 1 1 % Demand Trend for Wheel Loaders 1% 1% % 1 % 1 % -% -1% -% -1% -1% -1%
«Topic» "Hitachi Town Planning Fair 21" 3 4 HCM Japan held the "Hitachi Town Planning Fair 21" for 4 days from May 28th to 31st at a special event space in Ariake, Tokyo. The theme of this exhibition was "contribution to new and eco-friendly town planning," and we displayed all 36 models of our machineries, including the ZX1K high lift and the ZW22HYB hybrid wheel loader in different zones: "urban civil engineering," "recycling," "material," "demolition," and "new technology." The event attracted approximately 3, visitors, and it was a great success. "Hitachi Town Planning Fair 21" exhibition space Display of the ZW22HYB hybrid wheel loader Demonstration in the new technology zone
FY1/1Q FY1/1Q Y1/1Q Y11/1Q Y12/1Q Y13/1Q Y14/1Q Y1/1Q CY1/1Q CY11/1Q CY12/1Q CY13/1Q CY14/1Q CY1/1Q FY1/1Q FY1/1Q <Europe> 4 GDP sustained a gradual recovery in the entire Eurozone. Demand for hydraulic excavators slightly decreased in the entire European continent as it was, negatively affected by a significant decrease in France (decreased by 6% y-o-y). GDP Growth Rate in Major Countries (y-o-y) (K units) Demand Trend for Mini Excavators 1.% 1%.% %.% -1% *Source: IMF, etc UK Germany France EUR zone 2 1 1 1% Others % Germany % Italy France -% UK -1% (K units) Demand Trend for Hydraulic Excavators (K units) Demand Trend for Wheel Loaders 2 1 1 1% % % -% Others Germany Italy France UK 2 1 1 1% % % -% Others Germany Italy France UK -1% -1%
«Topic» Participation to the "INTERMAT 21" in France 6 HCM Europe exhibited at "INTERMAT 21" held in Paris, France, for 6 days from April 2th to 2th. In our exhibition, we unveiled the new ZX3LC-6 hydraulic excavator and exhibited the ZW22HYB hybrid wheel loader, as well as other machineries. We also presented the 4DX Theater, which provides the effects of seat movement, breeze, and scent in synchronization with the 3D video of HCM products and their performance. The theater delivered the audience more realistic sensations and successfully impressed them with our products. "INTERMAT 21" exhibition space Exhibition of the ZX3LC-6 hydraulic excavator 4DX Theatre
CY1/1Q CY11/1Q CY12/1Q CY13/1Q CY14/1Q CY1/1Q FY1/1Q FY1/1Q CY1/1Q CY11/1Q CY12/1Q CY13 1Q CY14/1Q CY1/1Q FY1/1Q FY1/1Q <North America> 6 7 Housing starts revived, and construction investments were brisk. Demand for construction machinery was nearly unchanged y-o-y. (K units) GDP Growth Rate, Housing Starts in US (K units) Demand Trend for Hydraulic Excavators 2 1 GDP (y-o-y/right axis) 1% % 2 1 1% % 1 % 1 % Housing starts (Left axis) (Seasonally adjusted) -% -% -1% -1% *Bureau of Economic Census, US Census Bureau Construction Spending in US (y-o-y) (K units) Demand Trend for Mini Excavators 1% Residential Non-residential State & local 2 1% 12% 1 % 1% 1 % 7% -% % -1% *Bureau of Economic Census, US Census Bureau
CY1/1Q CY11/1Q CY12/1Q CY13/1Q CY14/1Q CY1/1Q FY1/1Q FY1/1Q <China> 7 8 GDP growth from April to June 21 remained flat at 7.%. Fixed asset investment has further decelerated. Significant demand decrease continued due to slowdown of real estate investment and excess inventory adjustment (decreased by 49% y-o-y). * 当社推定 4% 3% 2% 1% % GDP and Fixed Asset Investment GDP (Right axis) Fixed Asset Investment (y-o-y) (Left axis) (y-o-y) (7.%) (1.%) (%) ( 千台 ) 2 7 6 1 14 3 2 1 Demand Trend for Hydraulic Excavators Y-o-y comparison data is limited to foreign manufactures only 1% Domestic 国産 Foreign 外資 1% % % -% -1% -1% *National Bureau of Statistics of China Quarterly Demand for Hydraulic Excavators by Region (y-o-y) Demand Composition by Class for Mini Excavators and Hydraulic Excavators FY14 ///FY1 1Q North West -41%/-48%/-66%/-3% South West -29%/-4%/-%/-47% Total China -33%/-44%/-8%/-49% *Foreign manufactures only North East -39%/-37%/-66%/-62% North China -41%/-3%/-73%/-63% East China -3%/-49%/-6%/-3% South Middle China -26%/-41%/-47%/-34% 1% 8% 6% 4% 2% % FY12 1H 2H FY13 1H 2H FY14 1Q FY1 1Q 2t over 2t and below 4t~ 3~39t 21~29t 2t 1~1t 6~1t ~6t Foreign manufactures only
Topic Chinese Market 8 9 (K units) 1 1 (K units) 9 8 7 6 (Compared to the same month in the previous year) Monthly Demand Trend for Hydraulic Excavators (Foreign Manufactures Only) Apr. 4 月 May. 月 Jun. Jul. 7 月 Aug. 8 月 Sep. 9 月 Oct. 1 月 Nov. 11 月 Dec. 12 月 Jan. 1 月 Feb. 2 月 Mar. 3 月 4 Apr. 月 May. 月 Jun. Jul. 7 月 Aug. 8 月 Sep. 9 月 Oct. 1 月 11 Nov. 月 Dec. 12 月 Jan. 1 月 Feb. 2 月 Mar. 3 月 Apr. 4 月 May. 月 Jun. Chinese New Year Jan 31, 214 Feb 19, 21 Feb 8, 216 y-o-y -2% -33% -44% -8% FY213 FY214 FY21 Monthly Demand Trend for Hydraulic Excavators -49% (Foreign Manufactures only) 6% 4% 2% % -2% -4% -6% -8% 4 FY213 Actual 3 2 1 Actual result (From April to June) FY21 (Forecast) FY214 Actual Apr. 4 月 May. 月 Jun. Jul. 7 月 Aug. 8 月 Sep. 9 月 Oct. 1 月 Nov. 11 月 Dec. 12 月 Jan. 1 月 Feb. 2 月 Mar. 3 月
FY1/1Q FY1/1Q FY1/1Q FY1/1Q CY1/1Q CY11/1Q CY12/1Q CY13/1Q CY14/1Q CY1/1Q <Asia, Oceania, and India> 9 1 Regarding Asia and Oceania, while demand in Indonesia, Malaysia, Australia, etc. are continuously decreasing, demand in Thailand and the Philippines are robust (decreased by 1% y-o-y). Demand in India is on an upward trend due to new policy effect implemented by the new government (increased by % y-o-y). 1 8 6 4 2 Demand Trend for Hydraulic Excavators in Asia & Oceania (K units) 1% 1% % Others NZ % Australia Thailand (%) 2 1 1 Malaysia - -1 GDP Growth Rate in Major Countries (y-o-y) *Source: IMF, etc Indonesia India Singapore Thailand Calculation criteria for GDP growth rate in India was revised in CY213 Demand Trend for Hydraulic Excavators in India -% (K units) 1% Singapore 4 1% Malaysia % 3-1% % 2 Indonesia -% 1-1% -1% -1%
FY1/1Q FY1/1Q FY1/1Q FY1/1Q <Russia and the Middle East> 1 11 Russia Demand has further decelerated along with the economic downturn caused by crude oil and Ruble depreciation (decreased by 78% y-o-y). Middle East Demand for hydraulic excavators slightly decreased, mainly in Gulf countries (decreased by 3% y-o-y). (US$) 1 12 1 7 Price Trend of Crude Oil and Natural Gas Natural Gas (Right axis) Crude Oil (Left axis) <IMF forecast as of Jun.> FY1 FY11 FY12 FY13 FY14 FY1 *Created by HCM, the source from IMF HP (US$) (K units) 2 1 1 4 3 2 1 Demand Trend for Hydraulic Excavators in Russia *Ex-Works base *Incl. Local manufacturing 1% % % -% -1% Topic Participated CTT Moscow 21 in Russia Exhibition Space Exhibited hydraulic excavators manufactured in Russia, etc. (K units) 4 3 2 1 Demand Trend for Hydraulic Excavators in the Middle East *Ex-Works base 1% % % -% -1% Others UAE Saudi Arabia Turkey *Data concerning Turkey is on a retail-sales basis, unlike the others.
FY9/1Q FY1/1Q FY1/1Q FY9/1Q FY1/1Q FY1/1Q <Mining Machinery> 11 12 Resource prices: coal prices remained more or less flat; iron ore prices remained sluggish after a significant decline. Mining machinery demand in FY214 remained stagnant (a decrease by approximately 3% y-o-y). In FY21, we expect a decrease by approximately 1% y-o-y. 6 (Units) Demand Trend for Ultra-large Hydraulic Excavators (1t<EX12> and over) 4 2 (Units) 2,4 1,8 1,2 6 Demand Trend for Dump Trucks (t<eh11> and over)* * Truck demand in the chart below was revised to display data for trucks with the loading weight of t or more.
<Mining Machinery> Demand proportion by region: Ultra-large Excavator (over 1t) (Units) 6 4 483 422 442 366 12 Central and South America North America Europe Russia CIS 13 3 2 217 199 173 12 111 Oceania Asia 1 China (Units) 3 3 2 2 1 1 FY211 上 FY211 下 FY212 上 FY212 下 FY213 上 FY213 下 FY214 上 FY214 下 FY21 上 1st half 2nd half 1st half 2nd half 1st half 2nd half 1st half 2nd half 1st half Demand proportion by region: Truck (over t) 2,992 2,638 2,469 2,47 1,37 1,239 926 1,3 931 Africa and Middle East Central and South America North America Europe Russia CIS Oceania Asia China FY211 1st half FY211 2nd half FY212 1st half FY212 2nd half FY213 1st half FY213 2nd half FY214 1st half FY214 2nd half FY21 1st half 11 上 11 下 12 上 12 下 13 上 13 下 14 上 14 下 1 上 Africa and Middle East
11 年 4 月 月 7 月 8 月 9 月 1 月 11 月 12 月 12 年 1 月 2 月 3 月 4 月 月 7 月 8 月 9 月 1 月 11 月 12 月 13 年 1 月 2 月 3 月 4 月 月 7 月 8 月 9 月 1 月 11 月 12 月 14 年 1 月 2 月 3 月 4 月 月 7 月 8 月 9 月 1 月 11 月 12 月 1 年 1 月 2 月 3 月 4 月 月 11 年 月 7 月 8 月 9 月 1 月 11 月 12 月 12 年 2 月 3 月 4 月 月 7 月 8 月 9 月 1 月 11 月 12 月 13 年 2 月 3 月 4 月 月 7 月 8 月 9 月 1 月 11 月 12 月 14 年 2 月 3 月 4 月 月 7 月 8 月 9 月 1 月 11 月 12 月 1 年 2 月 3 月 4 月 月 Supplementary Information BB Ratio 13 14 Book-to-Bill (BB) Ratio = Bookings (Orders received) / Billings (Value of shipment) 4% 4% 3% 3% 2% 2% 1% 1% % % BB Ratio (Ultra-large Hydraulic Excavator) *Non-consolidated basis (average of 6 months) 4% 4% 3% 3% 2% 2% 1% 1% % % BB Ratio (Dump Truck) *Non-consolidated basis (average of 6 months) Market environment remains severe. The BB ratio of hydraulic excavators slightly improved by capturing orders from North America and Australia.
«Topic» 14 1 EH3AC-3 dump trucks were shipped to Turkey We started shipping of 1 units of EH3AC-3 dump trucks to coal mines in Turkey We received an order for 2 units of EX8-6 from North America Two units of EX8-6 were ordered from an oil sands site in North America. The machineries will start operating in 216. Reference Photo: EH3AC-3 Dump truck Reference Photo: EX8-6LD Shovel Delivery of trolley trucks to South Africa We delivered 9 units of EH3AC-3 and 1 units of EH4AC-3 dump trucks to coal mines in South Africa, sequentially since last year. The trucks are operating in place as standard machinery. The trucks will be remodeled to trolley dump trucks in order, and they will start operating in August 21. Reference Photo: EH3ACII Trolley model
16 [Cautionary Statement] This material contains forward-looking statements that reflect management s views and assumptions in the light of information currently available with respect to certain future events, including expected financial position, operating results, and business strategies. Actual results may differ materially from those projected, and the events and results of such forward-looking assumptions cannot be assured. 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 the economic conditions in the Company s principal markets; changes in demand for the Company s products, changes in exchange rates, and the impact of regulatory changes and accounting principles and practices. END For further inquiries: Hitachi Construction Machinery Co., Ltd Public Relations Strategy office TEL : 3-383-86 FAX : 3-383-8224 Hitachi Construction Machinery Co., Ltd. 21. All rights reserved.