08 03-13 hitachi construction-results_q1-2

July 29, 2013

Hitachi Construction Machinery Co., Ltd.

© Hitachi Construction Machinery Co., Ltd. 2013. All rights reserved.

Vice President and Executive Officer

Yasushi Ochiai

Regional Market Environments and Projections

Business Result for the First Quarter ended June 30, 2013

2 Global Demand Trend for Hydraulic Excavator

Japan

Western Europe

North America

China

Asia Oceania

Others

Total

＊当社推定

(複写・転用は御遠慮下さい)

＊中国国産メーカ含まず

2429

47

44

73

111 7042

51 51

28 31 3320

10 14 23 28 34 36

3742

52

26

1523

2725 22 23

3230

24

17

10

13

1924 27 25

17

21

29

23 29

40

48

44

48 4318

25

36

32 15

2938

39

4141

223 219

202

225230

151161

221

179

155

0

25

50

75

100

125

150

175

200

225

250

275

300

'05 '06 '07 '08 '09 '10 '11 '12 '13 '13

千台

＊Inc. India

前回

見通

今回

見通

＊Source HCM

(Distributing, Copying, or forwarding is prohibited. )

＊Excluding Chinese manufacturer (K units)

Previous

forecast

Latest

forecast

Year-on-Year Change

Emerging Countries: 62％

※Emerging countries: China,

Asia/Oceania, and others.

'12 '13 '13Previous Forecast Latest Forecast

+25% +20% +27%-7% -13% -8%

+26% +15% +4%-41% +21% +21%

India -21% +10% -9%Indonesia -19% +15% -9%Others +9% +5% +5%

-8% +9% -2%Russia, EEurope, -3% +8% +8%Africa +39% -12% -9%

Middle East -2% -1% +1%Latin America -4% +13% +13%

+2% +4% +5%-10% +10% +8%Total

Japan

W Europe

N America

China

Asia & Oceania

Others

3

-40%

-20%

0%

20%

40%

FY08/1Q

2Q

3Q

4Q

FY09/1Q

2Q

3Q

4Q

FY10/1Q

2Q

3Q

4Q

FY11/1Q

2Q

3Q

4Q

FY12/1Q

2Q

3Q

4Q

FY13/1Q

＜Japan＞

New housing starts

Capex Public spending

＊Source: MLIT, Cabinet Office, and Construction Survey Company.

0

5

10

15

20

FY08/1Q

2Q

3Q

4Q

FY09/1Q

2Q

3Q

4Q

FY10/1Q

2Q

3Q

4Q

FY11/1Q

2Q

3Q

4Q

FY12/1Q

2Q

3Q

4Q

FY13/1Q

2Q

-150%

-100%

-50%

0%

50%

100%

150%＊Estimated by HCM (K units)

0

5

10

15

20

FY08/1Q

2Q

3Q

4Q

FY09/1Q

2Q

3Q

4Q

FY10/1Q

2Q

3Q

4Q

FY11/1Q

2Q

3Q

4Q

FY12/1Q

2Q

3Q

4Q

FY13/1Q

2Q

-150%

-100%

-50%

0%

50%

100%

150%

0

5

10

15

20

FY08/1Q

2Q

3Q

4Q

FY09/1Q

2Q

3Q

4Q

FY10/1Q

2Q

3Q

4Q

FY11/1Q

2Q

3Q

4Q

FY12/1Q

2Q

3Q

4Q

FY13/1Q

2Q

-150%

-100%

-50%

0%

50%

100%

150%

Market Environment: Housing/Public Spending and Capex (y-o-y) Demand Trend for Mini Excavators

Demand Trend for Hydraulic Excavators Demand Trend for Wheel Loaders

◇ Strong increase of demand derived from significant increase in public works and housing starts. ◇ Solid growth expected mainly in rental and general sectors in FY 2013.

(K units)

(K units)

＊Estimated by HCM

＊Estimated by HCM

4 ＜Europe＞＊Ex-Works base

＊Source: IMF, etc.

＊Estimated by HCM

(K units)

France

EUR zone

UK

Germany

France

UK

Germany

Italy

Others

France

UK

Germany

Italy

Others

France

UK

Germany

Italy

Others

Demand Trend for Hydraulic Excavators Demand Trend for Wheel Loaders

Demand Trend for Mini Excavators Market Environment: GDP Growth Rate in Major Countries (y-o-y)

◇ The European economy has shown signs of recovery in some countries such as the UK,

Germany, and Northern European countries; however the European region as a whole is still

suffering from stagnation.

◇ Demand in Europe continues to fall short in compare to previous year.

＊Estimated by HCM ＊Estimated by HCM

(K units)

(K units)

5 ＜North America＞

0

500

1000

1500

2000

CY08/1Q

2Q

3Q

4Q

CY09/1Q

2Q

3Q

4Q

CY10/1Q

2Q

3Q

4Q

CY11/1Q

2Q

3Q

4Q

CY12/1Q

2Q

3Q

4Q

CY13 1

Q

2Q

-10%

-5%

0%

5%

10%

Housing starts (Left axis)

GDP（y-o-y/Right axis)

＊Bureau of Economic Census, US Census Bureau

（Seasonally-adjusted) ）

＊Bureau of Economic Census, US Census Bureau

（K units）

0

5

10

15

20

FY08/1Q

2Q

3Q

4Q

FY09/1Q

2Q

3Q

4Q

FY10/1Q

2Q

3Q

4Q

FY11/1Q

2Q

3Q

4Q

FY12/1Q

2Q

3Q

4Q

FY13/1Q

2Q

-100%

-50%

0%

50%

100%

0

5

10

15

20

FY08/1Q

2Q

3Q

4Q

FY09/1Q

2Q

3Q

4Q

FY10/1Q

2Q

3Q

4Q

FY11/1Q

2Q

3Q

4Q

FY12/1Q

2Q

3Q

4Q

FY13/1Q

2Q

-100%

-50%

0%

50%

100%

Demand Trend for Mini Excavators

Demand Trend for Hydraulic Excavators

Market Environment: Construction Spending in the US (y-o-y)

Market Environment: The US Market Environment

◇ The number of housing starts remains at high level

◇ The investment of residential remains at high growth ratio while non-residential and public construction sector

are almost in same level as previous year

◇ Demand in N. America continues to be strong mainly in housing, energy, and rental businesses

50%

75%

100%

125%

150%

CY0

8/

1Q

2Q

3Q

4Q

CY0

9/

1Q

2Q

3Q

4Q

CY1

0/

1Q

2Q

3Q

4Q

CY1

1/

1Q

2Q

3Q

4Q

CY1

2/

1Q

2Q

3Q

4Q

CY1

3/

1Q

2Q

Residential Non-residential State&Local

（K units）＊Estimated by HCM

＊Estimated by HCM （K units）

6

0

2

4

6

8

10

12

14

16

April

May

June Ju

ly

Augu

st

Septem

ber

Octobe

r

Nove

mbe

r

Dece

mbe

r

Janu

ary

Februa

ry

March

0

10

20

30

40

50

60

70

FY08/1Q

2Q

3Q

4Q

FY09/1Q

2Q

3Q

4Q

FY10/1Q

2Q

3Q

4Q

FY11/1Q

2Q

3Q

4Q

FY12/1Q

2Q

3Q

4Q

FY13/1Q

2Q

-150%

-100%

-50%

0%

50%

100%

150%

＜China＞

＊当社推定

Domestic

Foreign

0%

10%

20%

30%

40%

CY08/1Q

2Q

3Q

4Q

CY09/1Q

2Q

3Q

4Q

CY10/1Q

2Q

3Q

4Q

CY11/1Q

2Q

3Q

4Q

CY12/1Q

2Q

3Q

4Q

CY13/1Q

2Q

0

5

10

15

20

North China -48%/-57%/-59%/-27%

North West -47%/-49%/-37%/-9%

South West -30%/-12%/-11%/45%

North East -60%/-69%/-61%/1%

South Middle China -40%/-40%/-34%/7%

East China -44%/-39%/-18%/36%

Total China -43%/-40%/-32%/11%

（y-o-y）

Fixed Assets Investment, (y-o-y) (Left axis)

ＧＤＰ（Right axis）（annualized）

Source: National Bureau of Statistics of China

＊Foreign Manufactures only ＊Estimated by HCM

FY13 Forecast

FY 12 Actual

FY11 Actual

Market Environment: GDP and Fixed Asset Investment Demand Trend for Hydraulic Excavators

Quarterly Demand for Hydraulic Excavators by Region (y-o-y) Monthly Demand Trend of Hydraulic Excavators in China

（K units）

（％）

◇ The demand in China, which continued to decline for 23 months consecutively, has turned positive since

April 2013 , but still careful observation is required to gauge the future direction.

◇ Demand in South West, East China and South Middle China increased from the previous year.

◇ Increased demand in small-medium size works for irrigation and infrastructure projects.

＊Estimated by HCM

FY12 2Q/3Q/4Q/FY13 1Q 【Chinese New Year】

Jan 23, 2012

Feb 10, 2013

Jan 31, 2014

※Actual of April ~June 2013

（K units）

＊Estimated by HCM

＊Foreign Manufactures only

7 《Topics》 Chinese Market

0%

20%

40%

60%

80%

100%

FY11/1Q 2Q 3Q 4Q FY12/1Q 2Q 3Q 4Q FY13/1Q

Demand Composition by Class for Mini Excavators and Hydraulic Excavators

0

5

10

15

Apr May Jan Jul AugSepOct Nov DecJan Feb Mar Apr May Jun Jul AugSepOct Nov DecJan Feb Mar Apr May Jun-80%

-60%

-40%

-20%

0%

20%

（K units）

Monthly Demand Trend for Hydraulic Excavator

FY 2012 FY2013

＊ Foreign Manufacturers Only

（y-o-y）

【Chinese New Year 】 Jan 23, 2012/Feb 10, 2013/Jan 31, 2014 ＊ Estimated by HCM

FY 2011

15tbelow

20～39t

～10t

20t

10～15t

21～29t

30～39t

40t-

＊ Estimated by HCM ＊ Foreign Manufacturers Only

8 ＜Asia/Oceania and India＞

Thai

Malaysia

Singapore

Indonesia

India

Thai

Malaysia

Singapore

Australia

Indonesia

ＮＺ

Others

◇ GDP Growth rate remains firm.

◇ Although the Indian market has firm demand related to infrastructure, the future of the economy as a whole

remains unpromising.

◇ The Indonesian market suffers from resource prices decrease, and it has been slowing down since many projects

are delayed.

(％)

0

1

2

3

4

5

FY08/1Q

2Q

3Q

4Q

FY09/1Q

2Q

3Q

4Q

FY10/1Q

2Q

3Q

4Q

FY11/1Q

2Q

3Q

4Q

FY12/1Q

2Q

3Q

4Q

FY13/1Q

2Q

-150%

-100%

-50%

0%

50%

100%

150%

0

5

10

FY08/1Q

2Q

3Q

4Q

FY09/1Q

2Q

3Q

4Q

FY10/1Q

2Q

3Q

4Q

FY11/1Q

2Q

3Q

4Q

FY12/1Q

2Q

3Q

4Q

FY13/1Q

2Q

-150%

-100%

-50%

0%

50%

100%

150%＊Estimated by HCM (K units)

Demand Trend for Hydraulic Excavators in Asia & Oceania

Demand Trend for Hydraulic Excavators in India

Market Environment ：Real GDP Growth Rate (y-o-y)

＊Estimated by HCM (K units)

＊Source: IMF, etc.

9

石炭・パームオイル先物・木材価格

0

500

1000

'08 '09 '10 '11 '12 '13 '140

100

200

300

400

500(US$/t)

(US$/t)

0

1

2

3

4

FY08/1Q

2Q

3Q

4Q

FY09/1Q

2Q

3Q

4Q

FY10/1Q

2Q

3Q

4Q

FY11/1Q

2Q

3Q

4Q

FY12/1Q

2Q

3Q

4Q

FY13/1Q

2Q

-100%

-50%

0%

50%

100%＊Estimated by HCM

(K Units )

＜Topics＞Indonesian Market

Coal price are weak

Palm oil/Lumber

price are weak

Coal

（Right axis）

Lumber

（Right axis）

Palm Oil

(Left Axis)

＊ Created by HCM , the source from IMF HP

<Source: IMF>

Demand for Hydraulic Excavators

（y-o-y）

0%

50%

100%

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q

Demand Composition for Hydraulic Excavators by Classes ＊Estimated by HCM

～16t

30～40t

16～30t

40～75t

75t～

ＦＹ１１ＦＹ１２ＦＹ１３＊ Dotted lines, the forecast by IMF as of March 2013

Price of Thermal coal, Palm Oil Future and Lumber

10 ＜Russia and the Middle East＞

＊Source IMF/World Bank

UAE

KSA

Turkey

Others

0

1

2

3

4

5

FY08/1Q

2Q

3Q

4Q

FY09/1Q

2Q

3Q

4Q

FY10/1Q

2Q

3Q

4Q

FY11/1Q

2Q

3Q

4Q

FY12/1Q

2Q

3Q

4Q

FY13/1Q

2Q

-200%

-100%

0%

100%

200%(K units )

(US$)

Demand Trend for Hydraulic Excavators in Russia

Demand Trend for Hydraulic Excavators in Middle East Market Environment: Price Trend of Crude Oil and Natural Gas

＊Estimated by HCM

＊Ex-Works base

＊Incl. Local manufacturing

(US$)

Crude Oil

（Left axis）

Natural Gas

（Right axis）

<Estimated by World Bank> ＊Estimated by HCM

＊Ex-Works base (K units)

【Russia】 Demands for energy and infrastructure are same level as previous year.

【Middle East】 Demand for urban development and infrastructure is strong in

Turkey and Saudi Arabia.

《Topics》 New Customer for major Russian Iron

Ore Mine ordered 2 units of EX5600E-6LD

08 09 10 11 12 13 14

11

0

200

400

600

FY08/1Q

2Q

3Q

4Q

FY09/1Q

2Q

3Q

4Q

FY10/1Q

2Q

3Q

4Q

FY11/1Q

2Q

3Q

4Q

FY12/1Q

2Q

3Q

4Q

FY13/1Q

2Q

-100%

0%

100%

0

200

400

600

FY08/1Q

2Q

3Q

4Q

FY09/1Q

2Q

3Q

4Q

FY10/1Q

2Q

3Q

4Q

FY11/1Q

2Q

3Q

4Q

FY12/1Q

2Q

3Q

4Q

FY13/1Q

2Q

-100%

0%

100%

＊Estimated by HCM ＜Mining Machinery＞

Demand Trend for Ultra-large Hydraulic Excavators (100t and over)

◇ Resource prices remain unfavorable, and recovery of the mining market cannot be expected within

FY 2013.

◇ Demand will fall 10% below the previouse forecast.

Demand Trend for Mining Dump Trucks (150t and over)

0

100

200

300

400

500

1st

half

10

2nd

half

10

1st

half

11

2nd

half

11

1st

half

12

2nd

half

12

1st

half

13

Demand Trend by Region

Ultra-large Excavators

Demand Trend by Region

Mining Trucks

0

200

400

600

800

1000

1st

half

10

2nd

half

10

1st

half

11

2nd

half

11

1st

half

12

2nd

half

12

1st

half

13

Africa M. East

Asia

China

Oceania

Eur, Russia CIS

N. America

L. America

Africa M. East

Asia

China

Oceania

Eur, Russia CIS

N. America

L. America

（Units）

＊１５０ｔ and over

＊１００ｔ and over

＊Estimated by HCM

＊Estimated by HCM

＊Estimated by HCM

(y-o-y)

(y-o-y)

＊Estimated by HCM

（Units）