Business Result for the First Quarter ended June 30, 2018 Regional Market Environments and Projections

Transcription

1 Business Result for the First Quarter ended June 3, 218 Regional Market Environments and Projections July 2, 218 Masafumi Senzaki Executive Officer President, Marketing Div. Hitachi Construction Machinery Co., Ltd All rights reserved.

2 Global Demand Trend for Hydraulic Excavators 1 2, Excluding Chinese manufacturer (K Units) Emerging Countries 218:9% (Y-o-Y Change:+1%) *Emerging Countries: China, Asia/Oceania, and others Total China Others Asia Oceania *Incl. India North America Western Europe Japan FY '1 '11 '12 '13 14 '1 '16 '17 '18 '18 Previous Present Outlook Outlook Year-on-Year Change Total China '17 '18 Present Outlook +27% +4% +8% +14% Russia, CIS, E Europe +77% -16% Africa +6% +% Middle East +1% -2% Latin America +27% -6% Others +24% -7% India +21% +1% Indonesia +% +4% Others +13% -3% +22% +3% N America +18% +6% W Europe +7% +% Japan +8% -4% Asia & Oceania (Distributing, copying, or forwarding prohibited)

3 <Japan> FY1/1Q FY1/1Q FY1/1Q FY1/1Q 2 3 Housing investment, public investment, and capital investment have increased. Regarding demand for construction machinery from April to June 218, the demand growth for hydraulic excavators and wheel loaders decreased due to the end of last-minute demands in anticipation of the new emissions regulations. Market Environment: Housing/Public Spending and Capex (y-o-y) 4% 2% Public spending (Public work orders) *Source: MLIT, Cabinet Office, and Construction Surety Company (K units) 2 1 Demand Trend for Mini Excavators 1% 1% % % 1 % -2% -4% Capex (Orders for machinery, excluding foreign demands) New housing starts (number of houses) -% -1% -1% 2 1 Demand Trend for Hydraulic Excavators (K units) (K units) 1% 1% % 2 1 Demand Trend for Wheel Loaders 1% 1% % 1 % 1 % -% -1% -% -1% -1% -1%

4 <Europe> CY12/1Q CY13/1Q CY14/1Q CY1/1Q CY16/1Q CY17/1Q CY18/1Q FY1/1Q FY1/1Q FY1/1Q 3 4 Throughout the Eurozone, GDP growth rate declined y-o-y. Hydraulic excavators showed continued growth, while demand for mini excavators and wheel loaders slowed. (Demand for hydraulic/mini excavators and wheel loaders increased 7%, %, and 8% y-o-y, respectively.) 2% 1% % -1% GDP Growth Rate in Major Countries (y-o-y) *Source: IMF, etc UK 2 Germany 1 France EUR zone (K units) 2 1 Demand Trend for Mini Excavators 1% Others % Germany % Italy France -% UK -1% Demand Trend for Hydraulic Excavators (K units) (K units) 2 1% 2 Others 1 % 1 Germany 1 % Italy 1 -% France UK -1% Demand Trend for Wheel Loaders 1% Others % Germany % Italy France -% UK -1%

5 CY12/1Q CY13/1Q CY14/1Q CY1/1Q CY16/1Q CY17/1Q CY18/1Q FY1/1Q CY12/1Q CY13 1Q CY14/1Q CY1/1Q CY16/1Q CY17/1Q CY18/1Q FY1/1Q <North America> 4 While housing starts slowed, construction investment was brisk. Demand for hydraulic excavators increased but growth rate sluggish. Demand for mini excavators continued to increase (11% and 13% y-o-y, respectively). (K units) GDP Growth Rate, Housing Starts in US (K units) 2 1 GDP (y-o-y/right axis) 1% 2 % 1 Demand Trend for Hydraulic Excavators 1% % 1 % 1 % Housing starts (Left axis) (Seasonally adjusted) -% -% -1% -1% *Bureau of Economic Census, US Census Bureau 1% Construction Spending in US (y-o-y) Residential Non-residential State & local (K units) 2 Demand Trend for Mini Excavators 1% 12% 1 % 1% 1 % -% 7% -1% *Bureau of Economic Census, US Census Bureau

6 FY1/1Q CY12/1Q CY13/1Q CY14/1Q CY1/1Q CY16/1Q CY17/1Q CY18/1Q <China> 6 The GDP growth rate from April to June 218 remained stable at around 6.7%. Demand for hydraulic excavators increased (1. times y-o-y). 4% 3% 2% 1% % GDP and Fixed Asset Investment (y-o-y) GDP (Right axis) (6.7%) (.2%) Fixed Asset Investment (y-o-y) (Left axis) *National Bureau of Statistics of China (%) 1 Quarterly Demand for Hydraulic Excavators by Region (y-o-y) FY17 ///FY18 1Q North West 128%/46%/73%/41% South West 72%/77%/34%/43% Total China 12%/1%/4%/% *Foreign manufactures only North East 13%/167%/7%/-2% North China 22%/86%/129%/69% East China 99%/124%/3%/7% South Middle China 92%/12%/34%/64% Demand Trend for Hydraulic Excavators Demand Composition by Class for Mini Excavators and Hydraulic Excavators 千台 ) 7 Y-o-y comparison data is limited to foreign manufactures only 1% 1% 4t~ Domestic Foreign 1% % % -% -1% 8% 6% 4% 2% 2t over 2t and below 3~39t 21~29t 2t 1~1t 6~1t -1% % FY1 FY16 FY17 FY18 1Q 1Q 1Q 1Q ~6t Foreign manufactures only

7 <(Supplementary Information) Chinese Market> 6 7 (K units) 1 1 (K units) (Foreign Manufactures only) Monthly Demand Trend for Hydraulic Excavators (Compared to the same month in the previous year) y-o-y -1% +8% +83% +19% Apr. 4 月 May. 月 Jun. 6 月 7 Jul. 月 Aug. 8 月 Sep. 9 月 1 Oct. 月 11 Nov. 月 12 Dec. 月 Jan. 1 月 Feb. 2 月 Mar. 3 月 Apr. 4 月 May. 月 Jun. 6 月 Jul. 7 月 Aug. 8 月 Sep. 9 月 1 Oct. 月 Nov. 11 月 12 Dec. 月 Jan. 1 月 Feb. 2 月 Mar. 3 月 Apr. 4 月 May. 月 Jun. 6 月 Chinese New Year Jan 28, 217 Feb 16, 218 Feb, % +12% FY216 FY217 FY218 Demand Trend for Hydraulic Excavators (y-o-y) * Actual result (From April to June) FY217 Actual FY218 (Forecast) +1% +4% +% (Foreign Manufactures only) 28% 24% 2% 16% 12% 8% 4% % -4% -8% 6 FY216 Actual 4 2 Apr. 4 月 May. 月 Jun. 6 月 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

8 <Asia, Oceania, and India> FY1/1Q FY1/1Q CY12/1Q CY13/1Q CY14/1Q CY1/1Q CY16/1Q CY17/1Q CY18/1Q 7 8 Demand for hydraulic excavators increased in Indonesia, the Philippines, and Australia. Despite the decrease in Malaysia and Thailand, demand has increased in the entire Asia Pacific region (19% y-o-y). Demand for hydraulic excavator increased in India (12% y-o-y), mainly for infrastructure investments, such as railways and roads. 1 Demand Trend for Hydraulic Excavators in Asia & Oceania (K units) % 8 % 6 -% (%) GDP Growth Rate in Major Countries (y-o-y) 2 *Source: IMF, etc 1 Indonesia Malaysia India Thailand 1 - Singapore -1 * Calculation criteria for GDP growth rate in India was revised in CY213 4 Others -1% NZ Australia Demand Trend for Hydraulic Excavators in India (K units) 1% 6 2 Thailand -1% Singapore Malaysia Indonesia -2% % % -% -1%

9 <Russia and the Middle East> Y12/1Q Y13/1Q Y14/1Q Y1/1Q Y16/1Q Y17/1Q Y18/1Q FY1/1Q 8 9 In Russia, demand increased y-o-y, underpinned by the revival of crude oil prices. In the Middle East, demand remained at a low level, mainly in Saudi Arabia Foreign Exchange Rate of the Ruble Against US$ Against EUR (K units) 4 3 Demand Trend for Hydraulic Excavators in Russia *Ex-Works base *Incl. Local manufacturing 2% 1% FY12 FY13 FY14 FY1 FY16 FY17 *According to HCM s research 2 1 % -1% (US$) Price Trend of Crude Oil and Natural Gas Crude Oil (Left axis) Natural Gas (Right axis) 3. FY12 FY13 FY14 FY1 FY16 FY17 (US$) (K units) Demand Trend for Hydraulic Excavators in the Middle East *Ex-Works base (Turkey: retail-prices base) 1% % UAE % Saudi Arabia -% -1% Others Turkey *Created by HCM, the source from IMF HP

10 <Mining Machinery> 9 1 Demand for mining machinery in FY218 is expected to increase by 1% y-o-y. By region, main drive of demand increase is mainly in Asia and Central and South America. Ultra-large Excavator (over 1t), Truck (over 1t) (Units) Demand by product (Units) Demand by region 3, 3, 2, 2, DT(over 1t) SH(over 1t) 2, 2, Central and South America North America Europe Russia CIS Oceania Asia Africa and Middle East 1, 1, 1, 1, - FY12 FY13 FY14 FY1 FY16 FY17 FY18 *According to HCM s research FY12 FY13 FY14 FY1 FY16 FY17 FY18

11 <(Supplementary Information) BB Ratio> 1 11 BB Ratio (Ultra-large Hydraulic Excavator, over 1t) 6% % 4% 3% 2% 1% % Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY11 FY12 FY13 FY14 FY1 FY16 FY17 FY18 6% BB Ratio (Dump Truck, over 1t) % 4% 3% 2% 1% % Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY11 FY12 FY13 FY14 FY1 FY16 FY17 FY18 * Book-to-Bill(BB)Ratio = Bookings (Orders received)/billings (Value of shipment) Non-consolidated basis (average of 6 months)

12 Pink colored Rigid Dump Trucks were delivered in support of customer s breast cancer eradication campaign 11 12

13 HCM to collaborate with Whitehaven Coal on Ausonomus Haulage System (AHS) Agreed with Whitehaven Coal to collaborate on the design and implementation of an Autonomous Haulage System ( AHS ) to support the company s mining operations in North West New South Wales at its Maules Creek coal mine Delivery and commissioning of phased AHS deployment for the fleet of Hitachi EHAC3 trucks at Maules Creek. We will deliver Hitachi AHS as one of the core components of the company s Solution Linkage initiative utilizing ICT and IoT technology, partnering with our mining customers across the world. This will ensure both greater safety and efficiency of mining operations.

14 New value created by Hitachi Construction Machinery Customers needs Enhancement of safety Improvement of productivity Reduction of life-cycle cost Solution Linkage ICT/IoT solutions solving problems together with customers One Hitachi Hitachi Construction Machinery Open Innovation AHS: Autonomous Haulage System ICT: Information & Communication Technology * Wenco, ConSite is a registered trademark of Hitachi Construction Machinery Co., Ltd. * Solution Linkage is currently applying for registered trademarks.

15 14 1 i-construction Exhibition in Japan July 18~2, 218

16 1 16 More practical visualization of the construction site Solution Linkage Mobile More convenience in visualizing construction sites More simplicity in the management of construction progress More reassuring area notice Options. Daily report, health care Available in April 218 Map data 218 Google, ZENRIN

17 Scheduled to be available in September 218 Offered by Hitachi Kokusai Electronic, Inc Improving unstable telecommunication environment on the site Solution Linkage Wi-Fi Improving and Expanding the mobile communication environment ICT construction is possible even on sites with difficulties in telecommunication, such as bridges, highways, dam sites, etc. LTE coverage area Master unit connected to LTE line LTE coverage area Master unit connected to LTE line Construction site with many covered areas or height differences Weather-proof and easy to install Easy installation no communication expert needed Available as single-pipe or tripod type Mountainous or extensive site singlepipe Around 1m Around 2m tripod type

18 17 18 Easily measure daily amount of soil with a smartphone Solution Linkage Survey Speedy work just by recording objects using a smartphone no UAV needed No specialized surveying devices required Only a smartphone and a GNSS antenna *Contract for correction data transmission service required No advanced professional knowledge on surveying required On-site work only involves taking movies of measurement targets On-site confirmation of work progress information Processing on the cloud and on-site confirmation with a smartphone Scheduled to be available in October 218 Offered by Hitachi Solution, Ltd. Image is for illustration purposes.

19 18 19 New lineup of ICT Construction Machinery that meet Japanese construction site needs Solution Linkage Assist Foundation digging and trench digging 13t machine control ZX13USX-6 Rental starts in July 218 To be introduced in October 218 Car park and paving Blade machine control ZX3U-B Scheduled to be available in December 218

20 2 [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 : FAX : Hitachi Construction Machinery Co., Ltd All rights reserved.