The news came in the context of an international trading environment that Komatsu CEO and president Takuya Imayoshi noted is becoming 鈥渋ncreasingly complex and uncertain鈥� (see point 4 below).

The OEM reported a 6.2% rise in net sales in the year ended 31 March 2025, to 4.1 trillion yen (US$28.5 billion). Operating income rose 8.2% to 657.1 billion yen (US$4.6 billion).

But 2025 looks tougher. The company expects an 8.8% decline in net sales to 3.7 trillion yen (US$26 billion) and a 27.3% fall in operating income to 478 billion yen (US$3.3 billion), due to a combination of the appreciation in the value of the Japanese yen and the cost increases resulting from US trade tariff policy.

It expects net sales of construction, mining and utility equipment to be down 9.4% in 2025 to 3.4 trillion yen (US$23.8 billion). Segment profit to fall 28.5% to 428 billion yen (US$3 billion).

Here are four things we learned from Komatsu鈥檚 2024 full-year results:

1) Komatsu has shared its calculations on the impact of tariffs:

Komatsu has attempted to quantify the impact of additional US import tariffs into its projection for the 2025 financial year. Based on tariff rates set by the US as of 24 April, Komatsu has calculated that increased tariff costs will be 78 billion yen (US$550 million). Meanwhile, it estimated the impact on demand for its products, based on a 1.1% decline in nominal GDP growth due to the effects of tariffs. It has calculated that the resulting drop in demand will see a hit to sales of 50 billion yen (US$350 million) and a 15 billion yen (US$110 million) decline in profit.

Kiyoshi Hishinuma, executive officer, general manager of Komatsu鈥檚 Business Coordination Department emphasised to investors that Komatsu exports more construction and mining products and parts from the United States than it imports from overseas. 鈥淪o, we are an exporting company,鈥� he said via an interpreter, referring to its US construction and mining business.

Komatsu manufactures its ultra-large dump trucks for mining exclusively in the US and supplies them worldwide. Around 50% of the products it sells in the US are manufactured outside the US and imported, mainly equipment and parts for construction equipment. The other 50% of products it sells in the US are manufactured locally. Among locally manufactured products, construction equipment has a high proportion of imported parts, as compared to mining equipment, which has a high proportion of US-made parts.

Komatsu Smart Construction at Bauma 2025 in Germany (Photo: 必赢体育 Group)

2) Demand in many markets will be sluggish this year:

Komatsu is predicting a decline in global demand for its seven major construction, mining and utility equipment products of 0% to 5% in 2025, which it said reflects 鈥渢he impact of trade friction鈥�.

Demand in North America already dropped 7% in 2024 after a decline in housing starts and fall in demand from the rental and energy sectors. Komatsu has forecast demand in North America to drop another 5-10% in 2025.

It was a similarly tough year in 2024 in Europe, where demand fell 19%, centering on the major markets of Germany, the UK, and France. Demand there is expected to be down 0-5% on the 2024 financial year in 2025. 鈥淒espite positive changes such as consecutive interest rate cuts by the ECB and Germany鈥檚 massive fiscal expansion measures, business confidence in the region remains sluggish. Therefore we will closely monitor the situation,鈥� said Hishinuma.

Demand in South East Asia increased by 2% in 2024 but Komatsu has forecast a decline of 0-5% in 2025. Demand in Japan was down 7% in 2024, primarily due to a decrease in demand for rental equipment, and is projected to be down 0-5% in 2025.

Demand for mining equipment was flat in 2024 and is also expected to decline between 0-5% overall in 2025, amid falls in North America and Oceania despite firmer demand elsewhere.

3) The OEM will take a 鈥漨ore detailed approach鈥� in construction

Takuya Imayoshi, president and CEO of Komatsu, detailed the manufacturer鈥檚 new strategic plan, as he warned that the external environment the company finds itself operating in is 鈥済rowing increasingly complex鈥�.

Takuya Imayoshi became president and CEO of Komatsu in January 2025 (Image: Komatsu)

Through an interpreter, Imayoshi said, 鈥淲e expect the external business environment to become increasingly complex and uncertain due to the complex inter-relationship of the political, economic and other risks, not to mention the drive towards carbon neutrality and rapid advancement in technology.鈥�

Its strategic plan, entitled 鈥淒riving value with ambition鈥�, attempts to identify the implications for the business based on those challenges.

Imayoshi said Komatsu would need to take a 鈥渕ore detailed approach鈥� to construction by region and by country. He highlighted growing markets in Asia and Africa as two areas where the company should do more to meet the needs of customers.

鈥淚n other areas, we must mitigate the impact of the geopolitical risks and heighten economic security across the supply chain. Here, we must change the sources and reassess the procurement ratio to build a more robust supply network,鈥� he said.

Discussing Komatsu鈥檚 business portfolio, Imayoshi said the company would improve growth and profitability in its mainstay mining and construction business through 鈥渆volved and more widely adopted solutions鈥� that drive value. But it also plans to grow its aftermarket business and strengthen product planning in growth regions. Komatsu also aims to grow its forestry machinery business and Imayoshi said the company aims for it 鈥減lay a role as a third pillar of our business, together with the mining and construction鈥�.

4) It will spend even more on R&D

The Japanese manufacturer is planning to pour even more money into developing new products and technology.

The company said it would spend 119 billion yen (US$830 million) on research and development in 2025. That is expected to represent a 3.2% share of sales, which is an increase on the 2.7% share of sales that it spent on R&D in 2024.

The vast majority of the 119-bilion-yen R&D budget for 2025 will be spent on the research and development of construction, mining, and utility equipment (108.9 billion yen or US$760 million).