EUR 850.00 For Business Accounts Only

Morningstar | Standard Stewardship Rating and FVE for Komatsu Remain Intact Following Change in Management

Komatsu is the second-largest construction equipment manufacturer in the world by revenue. Its core construction, mining, and utility equipment business contributes around 90% of revenue. The remainder comes from its retail finance business and industrial machinery and others, which includes metal forging, stamping presses, machine tools, and defense-related equipment. The Americas and Asia are the main markets for Komatsu, accounting for more than 80% of revenue, followed by Europe and the Commonwealth of Independent States. Komatsu’s superior product quality and brand name have helped to solidify its leading position in the construction machinery space globally with Interbrand ranking it in the top 20 of Japan’s Best Global Brands for the past 10 years. Komatsu’s focus on providing machinery with low total cost of ownership helps it to appeal to customers as the total cost of ownership includes not only the purchase costs but also all future costs comprising labor costs, maintenance and repair costs, spare parts, interest rates, insurance, depreciation, taxes, fuel consumption, and others. It constantly works together with its customers to provide suggestions and solutions to run its machinery in an efficient manner.Komatsu has been actively investing in research and development, focusing on artificial intelligence technology and Internet of things. Its notable technological innovations include the first hybrid hydraulic excavator, well-known GPS monitoring system Komtrax, and the first commercialization of an autonomous haulage system for mining. We believe that leveraging advancements in technology helps to drive growth for the company and improve the competitiveness of its products. In addition, Komatsu is continuously improving its aftermarket services through its extensive distributor and service network as well as providing retail finance services to its customers. We give Komatsu a narrow moat rating and expect it to generate an average return on invested capital of 14% over the next five years.