Hitachi Construction Machinery : Financial Results for the Year Ended March 31, 2023 (IFRS)

Consolidated Financial Results for the Year Ended March 31, 2023

(IFRS)

April 26, 2023

Listed company: Hitachi Construction Machinery Co., Ltd. (HCM)

Stock exchange: Tokyo (Prime Market) Code number: 6305 URL https://www.hitachicm.com/global/en/

Representative: Masafumi Senzaki, President and Executive Officer, COO

Scheduled date of ordinary General Meeting of Shareholders: June 26, 2023

Scheduled date of commencement of payment of dividends: May 31, 2023

Scheduled date for submission of Securities Report: June 27, 2023

Supplementary materials to the financial statements have been prepared: Yes

Presentation will be held to explain the financial statements: Yes (for institutional investors, analysts and journalists)

												(Rounded off to the nearest million)
1. Consolidated results for the year ended March 2023 (April 1, 2022 to March 31, 2023)
(1)	Consolidated results						(%: Changes from the same period of the previous fiscal year)
					Adjusted		Income before				Net income
		Revenue				Net income	attributable to
			Operating income	income taxes
							owners of the parent
		Millions of		%	Millions of		%	Millions of		%	Millions of	%	Millions of		%
March 31, 2023	yen			yen			yen			yen		yen
1,279,468		24.8	135,701		45.1	112,661		1.6	75,722	(5.2)	70,175		(7.5)
March 31, 2022	1,024,961		26.0	93,518		185.9	110,869		333.5	79,864	446.0	75,826		633.3

Notes: "Adjusted operating income" is presented as revenues less cost of sales as well as selling, general and administrative expenses.

	Net income attributable to	Net income attributable to	Profit on equity attributable	Ratio of income before	Operating income to
	owners of the Parent per share	owners of the Parent per share
	(basic)	(diluted)	to owners of the parent	income taxes	Revenue
	Yen	Yen	%	%	%
March 31, 2023	330.00	330.00	11.0	7.4	10.4
March 31, 2022	356.57	356.57	13.5	8.4	10.4

References: Share of profits (losses) of investments accounted for using the equity method; March 31, 2023: ¥(5,537)million, March 31, 2022: ¥6,224million "Net income attributable to owners of parent per share (basic)" and "Net income attributable to owners of parent per share (diluted)" are calculated based on "Net income attributable to owners of parent".

1. Consolidated financial position

	Total assets	Total equity	Total equity attributable to	Equity attributable to owners	Equity per share
	attributable to owners of
			owners of the parent	of the parent ratio	the parent
	Millions of yen	Millions of yen	Millions of yen	%	Yen
March 31, 2023	1,627,003	701,040	659,992	40.6	3,103.66
March 31, 2022	1,409,560	667,931	611,608	43.4	2,876.11

1. Consolidated cash flows

	Net cash from operating activities	Net cash from investing activities	Net cash from financing activities	Cash and cash equivalents at
	end of year
	Millions of yen	Millions of yen	Millions of yen	Millions of yen
March 31, 2023	(26,135)	(42,647)	87,089	111,992
March 31, 2022	39,317	(6,854)	(25,615)	94,257

2. Dividends status

		Cash dividends per share				Dividend Payout	Dividend
							Dividends paid	Ratio	attributable to
	First	Second	Third		Year end	Total	(Total)	owners of the parent
		(Consolidated)
	Quarter	Quarter	Quarter			(Consolidated)
March 31, 2022	Yen	Yen	Yen		Yen	Yen	Millions of yen	%	%
－	45.00	－		65.00	110.00	23,392	30.9	4.2
March 31, 2023	－	50.00	－		60.00	110.00	23,391	33.3	3.7
March 31, 2024	－	－	－		－	－		－
(Projection)
Interim and year-end dividends for the fiscal year ending March 2024 are to be determined.

(English translation of "KESSAN TANSHIN" originally issued in the Japanese language.)

3. Consolidated earnings forecast for the full year ending March 2024 (April 1, 2023 to March 31, 2024)

									Net income
	Revenue		Adjusted		Income before		Net income attributable to	attributable
				to owners of
		Operating income		income taxes		owners of the parent
						the parent
									per share
March 31,	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
2024	1,300,000	1.6	140,000	3.2	131,000	16.3	82,000	16.9	385.61

Notes: The percentages indicated show changes from the same period of the previous fiscal year.

*Notes

1. Important changes in the scope of the consolidation during period (changes involving specific subsidiaries accompanying changes in the scope of consolidation): None
2. Changes in accounting policies; changes in accounting estimates

[1]	Changes in accounting policies required by IFRS	None
[2]	Changes in accounting policies other than those in [1]	None
[3]	Changes in accounting estimates	None

1. Number of outstanding shares (common shares)
   [1] Number of outstanding shares (including treasury shares)

March 2023	215,115,038
March 2022	215,115,038
[2] Number of treasury shares
March 2023	2,465,562
March 2022	2,464,315
[3] Average number of common shares outstanding during the fiscal year (shares)
March 2023	212,650,036
March 2022	212,651,357
(Reference) Non-consolidated Financial Results
1. Non-consolidated results for the year ended March 2023(April 1, 2022 to March 31, 2023)
(1) Non-consolidated results						(%: Changes from the same period of the previous fiscal year)
	Net sales			Operating income	Ordinary income		Net income
	Millions of yen		%		Millions of yen		%	Millions of yen		%	Millions of yen		%
March 31, 2023	726,894		31.7		29,942		68.7	57,595		9.2	48,904		(27.6)
March 31, 2022	551,859		40.5		17,744		－	52,733		489.1	67,589		456.7
Notes: The percentages indicated show changes from the same period of the previous fiscal year.
	Net income per share		Net income per share (Diluted)
March 31, 2023			Yen				Yen
		229.97				229.97
March 31, 2022			317.84				317.84
(2) Non-consolidated financial position
	Total assets			Net assets		Equity ratio		Net assets per share
	Millions of yen	Millions of yen			%			Yen
March 31, 2023			883,465				382,237			43.3			1,797.50
March 31, 2022			715,436				356,424			49.8			1,676.09

(Reference) Total equity at fiscal year-end March 2023: ¥382,237 million March 2022: ¥356,424 million

Indication of audit procedure implementation status

This earnings report is exempt from audit procedure.

(English translation of "KESSAN TANSHIN" originally issued in the Japanese language.)

Explanation on the appropriate use of results forecasts and other importantitems

Any forward-looking statements in the report, including results forecasts, are based on certain assumptions that were deemed rational as well as information currently available to the Company at this time. However, various factors could cause actual results to differ materially. Please refer to ''1. Management Performance and Financial Conditions,

1. Outlook for the Fiscal Year Ending March 2024'' of the attachment for conditions serving as assumptions for results forecasts.

(English translation of "KESSAN TANSHIN" originally issued in the Japanese language.)

Index of the Attachment
1. Management Performance and Financial Conditions
(1) Management Results	2
(2)	Outlook for the Fiscal Year Ending March 2024	5
(3)	Analysis of Financial Condition	7
(4)	Dividend Policy	9
2. Our Fundamental Position Concerning Selection of Accounting Standards Policy	10
3. Consolidated Financial Statements
(1)	Consolidated Balance Sheets	11
(2)	Consolidated Statements of Income	12
(3)Consolidated Statements of Comprehensive Income	13
(4)	Consolidated Statements of Changes in Equity	14
(5)	Consolidated Statements of Cash Flows	16
(6)	Notes on Consolidated Financial Statements
(Notes on the Preconditions for a Going Concern)	17
(Changes to accounting policies)	17
(Revision of the post-termination benefit system)	17
(Important matters for compiling consolidated financial statements)	18
(Segment Information)	21
(Note on consolidated statements of income)	25
(Notes on Investments accounted for using the equity method)	27
(Earnings per share)	28
(Important subsequent events)	28

1

1. Management Performance and Financial Conditions

(1) Management Results

In the three-yearmedium-term management plan entitled " Realizing Tomorrow's Opportunities 2022 ", which ended in FY2022, the Consolidated Group is currently working to achieve sustainable growth and improve enterprise value through four management strategies:① Strengthen value chain business; ②Provide enhanced solutions at every contact with customers; ③Form highly flexible corporate structure; and a new one ④Realize strategies throughout North, Central and South America.

During the fiscal year under review (April 1, 2022 to March 31, 2023), demand for hydraulic excavators remained at the high level of the previous fiscal year in major regions other than China. Demand remained firm, especially in developed countries. Demand for mining machinery remained firm throughout the global market, excluding Russia, due to continued strong appetite for customers' investment against a backdrop of high resource prices and continued demand for overhaul and regular maintenance associated with high utilization. Under these circumstances, new machinery sales of both construction and mining and parts and services in the Americas, where we began full-scale independent business from March 2022, significantly increased year on year. The efforts we have been focusing on have paid off, and the mining business and value chain business have achieved record-high revenues. These results, combined with the impact of foreign exchange rates and other factors, resulted in a significant increase in overall revenue to a record ¥1,279,468 million (an increase of 24.8% year on year).

As for consolidated income items, adjusted operating income was a record high of ¥135,701 million (an increase of 45.1% year on year), due to promoting the increase in selling prices of products and parts in major regions globally, as well as the increase in revenue and the impact of foreign exchange rates and other factors, despite the impact of cost increases, mainly in steel prices and logistics costs.

Net income attributable to owners of the parent was ¥70,175 million (an decrease of 7.5% year on year), affected by one-time loss associated with revisions to realize a sustainable pension plan, impairment losses on investments accounted for using the equity method, and the absence of a gain on transfer of shares in an equity-method affiliate associated with the dissolution of a joint venture with Deere & Company that occurred in the 4Q of the previous fiscal year.

Business results by segment are described below.

• Construction machinery business

During the fiscal year under review (April 1, 2022 to March 31, 2023), revenue was ¥1,154,136 million (an increase of 23.6% year on year) and adjusted operating income was ¥123,954 million (an increase of 44.2% year on year).

The business impact of procurement and logistics delays that occurred in the 1Q of the current fiscal year improved significantly from the 2Q. The Americas business, which began full-scale independent development, also performed better than expected. Supported by strong orders in various regions, both new machinery sales for construction and mining and the value chain business, centered on parts and services, performed well significantly growing year on year.

②Solution business

This segment consists primarily of Bradken Pty Limited and its subsidiaries, which are engaged in the parts and services business in the after-sales of mining facilities and

2