October 28, 2013

Hitachi Construction Machinery Co., Ltd.

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

Business Results for the Second Quarter ended

September 30, 2013

Business Results for the Second Quarter ended September 30, 2013

Yukie Nakayama, who belongs to the Public Relations Strategy Office (left in the

photo) received the Silver Medal at the World Championship for Clay Shooting.

（Billions of yen）

Ⅰ. Summary of Consolidated Results

• On a regional basis, while net sales of Asia/Oceania and North America decreased compared to the

previous year, net sales of the other regions mainly in Japan/China increased, and considering the

influence of the favorable exchange rate and the exclusion of TCM from the consolidated results (-14.8

billion yen), total net sales increased from the previous year.

• Though mining sales decreased, operating income and ordinary income increased because of the cost

reduction and the favorable exchange rate.

• Net income of the 1st half of FY 2013 (Q1+Q2) decreased from the same period of the previous year due

to the influence of a decrease in extraordinary gains.

１

Change

Net Sales -1%

Operating Income 20%

22%

-34%Exchange rate (YEN/USD)

Exchange rate (YEN/EUR)

Exchange rate (YEN/RMB)

Apr 1~Sep 30

of FY 2013

(395.0)

373.7(28.0)

25.0(21.0)

(13.5)

20.9

376.9

Apr 1~Sep 30

of FY 2012

10.7

16.8

79.5

101.0

12.6

98.8

130.0

16.1

16.1

13.7Ordinary Income

Net Income

F

X

Cash dividends per share (yen) 25 20 5

( ) Previous forecast as of July 2013

（Billions of yen）

Summary of Consolidated Results

• On a regional basis, while net sales of Asia/Oceania and North America decreased compared to the

previous year, net sales of the other regions mainly in Japan/China increased, and the total net sales

increased from the previous year.

• Though mining sales decreased, operating income and ordinary income increased because of the cost

reduction and the favorable exchange rate.

• Net income of the 2nd quarter of FY 2013 (Q2 only) increased from the same period of the previous year

although extraordinary gain decreased.

２

Amount

Net Sales 10.9

(4.4%)

Operating Income 7.8

(3.5%)

7.9

(6.1%)

1.0

Exchange rate (YEN/USD)

Exchange rate (YEN/EUR)

Exchange rate (YEN/RMB)

July 1~Sep 30 July 1~Sep 30

of FY 2013 of FY 2012

(7.4%)

Ordinary Income 13.9 6.1

(6.3%)

187.2 176.2

(8.3%)

15.5 7.7

Net Income 11.8 10.8

F

X

99.0 78.6

131.1 98.4

16.2 12.4

129%

10%

Increase(Decrease)

%

6%

102%

Consolidated Statements of Income ３

Increase (Decrease)

Amount ％

Net Sales 373.7 376.9 (3.1) -1%

Cost of Sales 269.7 279.5 (9.8) -4%

SGA Expenses 79.0 76.4 2.6 3%

Operating Income 25.0 20.9 4.1 20%

Non-operating Income (Loss) (8.3) (7.2) (1.1) 15%

Ordinary Income 16.8 13.7 3.0 22%

Extraordinary Income 2.1 8.6 (6.5) -75%

Income Taxes 5.3 3.9 1.4 36%

Minority Interests 2.9 2.3 0.6 24%

Net Income 10.7 16.1 (5.4) -34%

Apr 1 ~ Sep 30

of FY 2012

Apr 1 ~ Sep 30

of FY 2013

（Billions of yen）

Sales by Geographic Region (Consolidated)

• Sales in China increased by 15.7 billion yen (142%) year on year.

• Sales in Japan also increased 20.6 billion yen (125%) considering the influence of the exclusion of TCM

(9.7 billion yen) from the consolidated results. On the other hand, sales in Asia & Oceania decreased by

23.3 billion yen (82%) year-on-year.

４

Overseas Sales

Ratio 73%

Overseas Sales

Ratio 76%

376.9

(Year-on-Year)

82%

70%

118%

142%

112%

119%

99%

Year-on-Year Change

Japan

The

Americas

China

Europe

Russia

CIS Middle East

Africa

Asia &

Oceania

Japan 28%

28%

10%

China14%

Asia & Oceania The Americas

11%

Europe

9%

Russia, CIS, Middle

East, Africa

FY13

(Apr 1-Sep 30)

Actual 373.7 bil. yen

Japan

24%

34%

8%

China

10%

Asia & Oceania

Russia, CIS, Middle

East, Africa

Europe

8%

The Americas

16%

FY12

(Apr 1-Sep 30)

Actual

376.9 bil. yen

(Billions of yen)

FY 12

(Apr 1–Sep 30)

Actual

FY 13

(Apr 1 – Sep 30)

Actual

%

373.7

39.4 44.1 56.2 67.9 66.2

15.1 16.3 31.4

72.8 63.8 68.5

82.5 97.2

15.7 12.9

28.6

0

20

40

60

80

100

120

140

160

180

2008 2009 2010 2011 2012 2013(Q1)

2013(Q2)

2013Q1+Q2

Parts/Service Main Unit

39.4 44.1 56.2

67.9 66.2

15.1 16.3 31.4

90.5 77.1

82.5

98.2 96.6

27.3 24.0

51.3

0

20

40

60

80

100

120

140

160

180

200

2008 2009 2010 2011 2012 2013

(Q1)

2013

(Q2)

2013

Q1+Q2

Mining Construction

Mining/Parts & Service Sales (Actual) ５

Mining (Note) is the percentage of the total sales of the

company as a whole.

%

15% 18% 16%

18% 21%

16%

17% 16%

112.2

163.4

29.2 30.8

60.0

107.9 124.7

150.4

17% 20%

18%

20% 21%

22% 23%

22%

129.9 121.2

138.7

166.1 162.8

40.3 42.4

82.7

（Billions of Yen） Parts & Service

(-27%)

(-42%)

(-5%)

(-13%)

(-29%)

(6%)

(-37%)

(-50%)

(-14%)

(1%)

(4%)

(-5%)

(10%)

(6%)

(8%) (-6%)

( - )

(-14%)

(9%)

(18%)

(-3%)

(-2%)

(-1%)

(-3%)

(Note) (%) is the change ratio from the same period

the previous year.

（Billions of Yen）

Parts & Service

Q1 Q2

Q2 Q1

Machinery

Consolidated Statements of Income ６

Increase (Decrease)

Amount ％

Net Sales 373.7 376.9 (3.1) -1%

Cost of Sales (72.2%)269.7

(74.2%)279.5 (9.8) -4%

SGA Expenses (21.1%)79.0

(20.3%)76.4 2.6 3%

Operating Income (6.7%)25.0

(5.6%)20.9 4.1 20%

Non-operating Income (Loss) (8.3) (7.2) (1.1) 15%

Ordinary Income (4.5%)16.8

(3.6%)13.7 3.0 22%

Extraordinary Income 2.1 8.6 (6.5) -75%

Income Taxes 5.3 3.9 1.4 36%

Minority Interests 2.9 2.3 0.6 24%

Net Income (2.9%) 10.7 (4.3%) 16.1 (5.4) -34%

Apr 1~Sep 30 Apr 1~Sep 30

of FY 2013 of FY 2012

（Billions of yen）

10.4% 10.3%

6.6%

2.4%

0.6%

9.3%

2.6%

4.5%

5.7%

7.7%

4.7%

6.5% 6.1%

8.6%

6.6%

4.4% 4.2%

10.6%

5.1%

8.3%

△8.0%

△6.0%

△4.0%

△2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

0

500

1,000

1,500

2,000

2,500

3,000

第1四半期

第2四半期

第3四半期

第4四半期

第1四半期

第2四半期

第3四半期

第4四半期

第1四半期

第2四半期

第3四半期

第4四半期

第1四半期

第2四半期

第3四半期

第4四半期

第1四半期

第2四半期

第3四半期

第4四半期

第1四半期

第2四半期

2008年度 2009年度 2010年度 2011年度 2012年度 2013年度

売上高

営業損益率 and loss ratio

Operating Profit

Net Sales

1Q

2Q

3Q

4Q

-5.5% -1.8%

300

250

200

150

100

50

4Q

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

Sales 233.9 220.2 146.1 144.0 132.3 140.0 141.4 192.0 167.3 178.8 184.0 243.6 176.0 188.9 188.4 263.9 200.6 176.2 177.6 217.9 186.6 187.2Operating

income/loss 24.4 22.8 9.6 (7.9) (2.4) 3.4 0.9 17.8 4.3 8.0 10.6 18.7 8.2 12.2 11.5 22.8 13.3 7.7 7.4 23.2 9.6 15.5

FY 2013FY 2012FY 2008 FY 2009 FY 2010 FY 2011

EX rate/quarter １Ｑ ２Ｑ ３Ｑ ４Ｑ １Ｑ ２Ｑ ３Ｑ ４Ｑ １Ｑ ２Ｑ ３Ｑ ４Ｑ １Ｑ ２Ｑ ３Ｑ ４Ｑ １Ｑ ２Ｑ ３Ｑ ４Ｑ 1Ｑ ２Ｑ

US$ 105.4 107.0 95.0 95.2 96.8 92.8 90.1 90.8 92.0 85.9 82.6 82.3 81.7 77.9 77.4 79.3 80.2 78.6 81.2 92.4 98.8 99.0EUR 164.8 159.5 125.7 123.2 133.5 133.0 132.6 123.7 117.0 110.7 112.2 112.6 117.4 110.2 104.3 104.0 102.9 98.4 105.3 122.0 129.0 131.1RMB 15.2 15.7 13.9 13.9 14.2 13.6 13.2 13.3 13.4 12.6 12.4 12.5 12.6 12.1 12.2 12.6 12.7 12.4 13.0 14.9 16.1 16.2

FY 2012FY 2008 FY 2009 FY 2010 FY 2011 FY 2013

Billions of Yen

※Rounded off per quarter

Summary of quarterly consolidated sales and operating income (ratio) ７

FY 2008 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013

2Q

3Q

1Q

1Q

2Q

3Q

4Q

1

Q

2

Q

3

Q

4

Q

1

Q

2

Q

3

Q

4

Q

1

Q

2

Q

2

Q

3

Q

1

Q

3

Q

4

Q

1

Q

2

Q

3

Q

4

Q

1

Q

2

Q

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013

4

Q

－2.0%

－4.0%

－6.0%

－8.0%

（Billions of yen）

Consolidated Non-operating Income (Actual) ８

Apr 1~Sep 30

FY 2013

Apr 1~Sep 30

FY 2012 Change

Dividends/Interest income and

expenses (3.1) (4.6) 1.5Gains or loses on equity earnings

of affiliated companies (0.1) (0.1) 0.0

Foreign exchange losses, net(6.3) (2.4) (3.9)

Others1.2 (0.1) 1.3

Total (8.3) (7.2) (1.1)

Consolidated Statements of Income ９

Increase (Decrease)

Amount ％

Net Sales 373.7 376.9 (3.1) -1%

Cost of Sales (72.2%)269.7

(74.2%)279.5 (9.8) -4%

SGA Expenses (21.1%)79.0

(20.3%)76.4 2.6 3%

Operating Income (6.7%)25.0

(5.6%)20.9 4.1 20%

Non-operating Income(Loss) (8.3) (7.2) (1.1) 15%

Ordinary Income (4.5%)16.8

(3.6%)13.7 3.0 22%

Extraordinary Income 2.1 8.6 (6.5) -75%

Income Taxes 5.3 3.9 1.4 36%

Minority Interests 2.9 2.3 0.6 24%

Net Income (2.9%) 10.7 (4.3%) 16.1 (5.4) -34%

Apr 1~Sep 30 Apr 1~Sep 30

of FY 2013 of FY 2012

（Billions of Yen）

-40-20

020406080

100120140160180200

(Billions of Yen)

Comparison of Consolidated Profit & Loss (Actual)

•Profit decrease of 17.4 billion yen due to a decrease in sales volume.

•Profit increase of 11.3 billion yen from Yen depreciation and 8.6 billion yen from price increase

and material cost down.

Ord

ina

ry Inco

me

Ord

ina

ry Inco

me

Ord

ina

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me

Sa

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olu

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De

cre

ase

Pric

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cre

ase

Fo

reig

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xch

an

ge

Ga

ins

Ma

teria

l Co

st D

ow

n

Ove

rhe

ad

Co

st U

p

Oth

ers

(Mix A

cco

un

t)

13.7

16.8

-17.4

2.2

11.3

6.4 -2.7 3.3 N

et In

co

me

Ne

t Inco

me

Extra

ord

ina

ry Lo

ss

Co

rpo

rate

Tax, e

tc.

16.1

10.7

3.0 -6.5

-1.9

FY 12

1Q+2Q Actual

FY 13

1Q+2Q Actual

１０

FY 12

1Q+2Q Actual

FY 13

1Q+2Q Actual

Consolidated Balance Sheets

• Accounts receivable (notes and accounts receivable, lease receivables and investment assets) decreased

by 33.4 billion yen from the end of the previous year.

• Inventory increase of 6.9 billion yen from the production increase for Japan, and temporary increase in the

parts.

１１

（Billions of yen）

(A)

13- 2Q

(B)

FY 12

(C)

12-2Q

(A-B)

Change

(D)

13-2Q

(E)

FY 12

(F)

12-2Q

(D-E)

Change

Cash and bank deposit 65.9 62.6 48.2 3.3Notes and accounts

payable 129.7 149.1 162.2 (19.4)

Accounts receivable 274.8 308.2 273.7 (33.4) Others 323.5 298.2 287.8 25.3

Inventories 321.8 314.9 284.1 6.9 Total current liabilities 453.2 447.3 450.0 5.9

Others 56.0 48.1 62.3 7.9 Total non-current liabilities 209.4 236.0 182.4 (26.6)

Total liabillities 662.6 683.2 632.4 (20.6)

Total current assets 718.5 733.8 668.3 (15.3) Minority interests 54.7 54.7 44.3 0.0Property, plant and

equipment 279.9 271.2 242.9 8.7Common stock, capital surplus,

and retained earnings 373.6 365.9 362.7 7.7

Intangible assets 29.3 32.7 34.8 (3.4) Others (7.4) (3.9) (35.8) (3.5)

Others 55.8 62.2 57.7 (6.4) (Shareholder's equity ratio) (33.7%) (32.8%) (32.5%) (0.9%)

Total fixed assets 365.0 366.1 335.3 (1.1) Total net assets 420.9 416.7 371.2 4.2

Total assets 1083.5 1099.9 1003.6 (16.4)Total liabilities and net

assets 1083.5 1099.9 1003.6 (16.4)

Unit 114.0 111.0 106.2 3.0 (37.3%) (35.7%) (35.0%) (1.6%)

Parts 108.3 97.1 59.7 11.2 Interest-bearing debt 404.2 393.1 351.3 11.1

Others 99.5 106.8 118.2 (7.3) Cash and Cash equivalents 67.7 68.1 63.6 (0.4)

Total inventories 321.8 314.9 284.1 6.9 (Deposit) (1.8) (5.4) (15.4) ((3.6))

（Days） Interest-bearing debt, net (31.1%) (29.6%) (28.7%) (1.5%)

Accounts receivable 130 146 121 (16) Debt 336.5 325.1 287.7 11.4

Inventories 153 149 125 4Notes and accounts

payable 62 70 71 (8) Net D/E Ratio 0.92 0.90 0.88 0.02

Net working capital 221 225 175 (4)

Inventories breakdown

On hand days(divided by net sales)

Consolidated Free Cash Flows

• Cash flows from operating activities is increased by 4.3 billion yen year-on-year to

30.4 billion yen, which generated positive cash flows of 5.3 billion yen.

１２

（Billions of yen)

Apr 1~Sep 30 of

FY 2013

Apr 1~Sep 30 of

FY 2012Change

Income before income taxes and minority interest 18.9 22.3 (3.4)

Depreciation and amortization 37.3 18.4 39.7 17.4 (2.4) 1.0

(Increase)decrease in accounts receivable 39.7 51.3 (11.6)

(Increase)decrease in inventories (5.5) (38.9) 33.4

(Increase)decrease in notes and accounts payable 13.1 (21.1) (9.9) (2.5) 3.2 (18.6)

Income taxes paid (11.8) (13.8) 2.0

Ohters, net (8.2) (9.7) 1.5

Net cash provided by (used in) operating activities 30.4 26.1 4.3

Cash flow margin for operating activities 8.2% 6.9% 1.3%

Net cash provided by (used in) investing activities (25.1) (11.4) (13.7)

Free cash flows 5.3 14.7 (9.4)

Year-on-Year change by region

Japan

Western Europe

North America

China

Asia & Oceania

Others

Total

Previous

forecast

Latest

forecast

Global Demand Trend for Hydraulic Excavator ＊Source HCM

(Distributing, copying, or forwarding is prohibited.)

＊Excluding Chinese manufacturer

Year-on-year Change

7%

10%

6%

48%

19%

10%

-6%

52% -2%

6%

10%

5%

50%

17%

12%

10%

12%

8%

32%

21%

17%

-10%

14%

12%

12%

21%

22%

19%

8%

16%

11%

11%

23%

20%

19%

Ⅱ. Consolidated Earnings Forecasts

• In Japan, in addition to rehabilitation demand, the demand for rental service continued to increase strongly and it is expected to

increase by 34% year-on-year to 38,000 units.

• Although demand in China has been in recovery trend, the forecast is unchanged at an increase of 21% year-on-year to 51,000

units.

• The global forecast is decreased by 1,000 units, resulted as an 8% increase year-on-year after reflecting decrease in the demand of

Asia & Oceania.

１３

8%

19%

18%

23%

11%

12%

17%

'12 '13 '13Previous forecast Latest forecast

+25% +27% +34%-7% -8% +2%

+26% +4% +0%-41% +21% +21%

India -21% -9% -22%Indonesia -19% -9% -27%

Others +9% +5% +2%-8% -2% -11%

Russia, EEurope,

CIS-3% +8% +8%

Africa +39% -9% -9%Middle East -2% +0% +0%Latin America -4% +13% +13%

+2% +5% +5%-10% +8% +8%

Asia & Oceania

Others

Total

JapanW EuropeN America

China

Thousands Units

Summary of Consolidated Earnings Forecasts

• As the sales increase in Japan/Europe, and the significant sales increase of crane products

as well as cost reduction offset the decrease in other slowdown regions that are mainly

affected by decreased mining sales, the current forecast is unchanged from the previous

forecast.

１４

（Billions of yen）

Change

Net Sales 7%

Operating Income 61%

90%

57%Exchange rate (YEN/USD)

Exchange rate (YEN/EUR)

Exchange rate (YEN/RMB)

10

(　　) Previous forecast as of July 2013

15.8

83.0 51.5

96.9

69.0

82.4

127.1 107.5

FY2013 FY2012

Forecast Actual

(830.0)

40

23.5

F

Y

830.0 772.4

(83.0)

(69.0)

Cash dividends per share (yen) 50

36.4

13.5

(37.0)

Net Income 37.0

Ordinary Income

Exchange rate in and after the third quarter of FY

2013 （Previous)

Yen/USD 95.0 (94.0)

Yen/EUR 125.0 (123.0)

Yen/RMB 15.6 (15.2)

Sales by Geographic Region (Consolidated)

• Although sales in Japan and Europe increased, the current forecast is unchanged as the

sales in Asia & Oceania and North America decreased.

１５

Overseas Sales Ratio ７５%

Overseas Sales Ratio ７３%

Overseas Sales Ratio 74%

Year-on-Year change %

772.4 (Billions of yen)

(Yr-on-Yr)

105%

75%

111%

132%

114%

114%

(Yr-on-Yr)

830.0 830.0

107%

Japan

The

Americas

Europe

China

Russia

CIS

M. East

Africa

Asia &

Oceania

96%

71%

131%

133%

119%

122%

107%

830 billion yen

FY13

Previous Forecast

Asia & Oceania

Russia, CIS

Middle East and

Africa

Europe

8%

The Americas

10%

The Americas

10%

Asia & Oceania

Russia, CIS

Middle East and

Africa

Japan

27%

China

15%

Europe

9%

China

15% Japan

26%

FY13

Latest Forecast

830 billion yen

Russia, CIS

Middle East and

Africa 10%

China

12% Japan

25%

Asia & Oceania

31%

The Americas

15%

Europe

7%

FY12

Actual

772.4 billion yen

39.4 44.1 56.2 67.9 66.2 66.0 68.4

31.4 37.0

90.5 77.1 82.5

98.2 96.6 112.2 102.3

51.3 51.0

0

20

40

60

80

100

120

140

160

180

200

2008 2009 2010 2011 2012 2013

Previous

forecast

2013

Latest

forecast

2013

1st half

actual

2013

2nd half

forecast

Mining Construction

Mining/Parts & Service Sales Trend (Forecast) １６

Parts & Service

Mining (注) は全社売上高に占める比率 % （Billions of Yen）

（Billions of Yen）

15% 18% 16%

18% 21%

17% 20%

18%

20% 21%

18% 18%

21% 21%

22% 19%

16%

19% 112.2

163.4

129.9 121.2

138.7

166.1 162.8

107.9 124.7

150.4 148.5 145.5

60.0

85.5

178.2 170.7

82.7 88.0

(Note) is the percentage of total sales of the

company as a whole.

%

(Note) (%) is the change ratio from the same period the

previous year.

.

(5%)

(1%)

(12%)

(-27%)

(-42%)

(-5%)

(-9%)

(-15%)

(0%)

(-11%)

(-21%)

(3%)

(9%)

(16%)

(0%)

(5%)

(6%)

(3%)

(1%)

(4%)

(-5%)

(9%)

(7%)

(12%)

Parts & Service Machinery

Comparison of Consolidated Profit & Loss (Forecast)

•Although sales of mining decreased from the previous forecast, due to the effect of costs and

overhead costs decrease, the previous forecast remains unchanged.

１７

36.4

69.0

23.5 37.0

-5.1

FY 12

Actual

FY 12

Actual

FY 13

Forecast

FY 13

Forecast

Ord

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Ord

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an

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Ga

in

Ma

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(Mix

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Ne

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Ne

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Ord

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Extra

ord

ina

ry L

oss

Co

rpo

rate

Tax e

tc.

2.4

25.8

11.4 -3.3 1.4

32.6 -11.4 -7.7 ( -5.0 )

( 2.1 )

( 31.6 )

( 13.8 ) ( -9.2 )

( -0.7 )

※( ) is forecast announced in July

100

0

Billions of yen

TEL : 03-3830-8065

FAX : 03-3830-8224

For further inquiries:

Norio Hayamizu Public Relations Strategy Office

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