Corporate Vision FY2021-1Q - Management Plan 2. Business Results 3. Company Outline and Topics - Hitachi Construction Machinery

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Corporate Vision FY2021-1Q - Management Plan 2. Business Results 3. Company Outline and Topics - Hitachi Construction Machinery
Corporate Vision
FY2021-1Q

1. Management Plan
2. Business Results
3. Company Outline and Topics

 Public Relations & Investor Relations Dept.
 Corporate Brand & Communications Div.

                                         © Hitachi Construction Machinery Co., Ltd. 2019. All rights reserved.   1
Corporate Vision FY2021-1Q - Management Plan 2. Business Results 3. Company Outline and Topics - Hitachi Construction Machinery
Management Plan

Medium-term Management Plan
“Realizing Tomorrow‘s Opportunities 2022”

(FY 2020-2022)

Kotaro Hirano
Executive Officer, President & CEO

                                     © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   2
Corporate Vision FY2021-1Q - Management Plan 2. Business Results 3. Company Outline and Topics - Hitachi Construction Machinery
Our achievements over the past three years                     Management Plan
and our initiatives for these three years

                                             Realizing Tomorrow’s
  CONNECT TOGETHER 2019
                                              Opportunities 2022

   Deepen the value chain                Value chain + Enhance
                                            digital solutions
 Parts and service (ConSite®)        Parts and service (ConSite® + parts
 Acquisition of Bradken /H-E Parts    remanufacturing + Bradken/H-E Parts)
 US & UK:start of rental business    Digital Mining
 Certified used equipment            Rental +used equipment
                                               →Global

     Global Restructuring                    Efficiency in development,
                                             marketing and production
      Efficiency at overseas sites
                                                  Global cooperation

                                              © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   3
Corporate Vision FY2021-1Q - Management Plan 2. Business Results 3. Company Outline and Topics - Hitachi Construction Machinery
Management Plan
Impact of COVID-19 on the business

Performance deteriorated in FY2020 due to the impact of COVID-19
Full-fledged recovery in market conditions other than China is expected to occur from
the second half of FY2021 onward
Performance grows due to expansion of the value chain and deepening of solutions

        Demand Trend for Hydraulic Excavators                  Revenue and Adjusted Operating Income Ratio
 [K units]
(千台)                                                            [billions of yen]
250                                                             12,000                                                                        12.0%
              229                                                              Revenue difference
                             220                                               from the previous plan COVID-19
225
                                                                10,000                                                         0 10%          10.0%
200
               69             53                                                                                              10,000
175
                                                                 8,000
                                                                                                   8,800                                      8.0%
150                           25                                           8,133
               25                                                                                            7.0%
125                                                              6,000                                                                        6.0%
                              48
               45
100
                                                                                                                           50%
                              32                                 4,000                 4.0%                                                   4.0%
 75            31
                                                                               43%
 50
               33             36                                 2,000                                                                        2.0%
 25
               26             26
  0                                                                   0                                                                       0.0%
   FY         FY20
             20年度         FY21 Forecast
                          21年度見通            FY22 Forecast
                                            22年度見通                               FY20
                                                                                20年度             FY21 Forecast
                                                                                                  21年度見通                FY22 Forecast
                                                                                                                         22年度見通
          China
         中国                Others
                          その他                アジア・大洋州
                                              Asia & Oceania
                                                                                      VC                                   New
                                                                                                                           新車 machine
         北米
          North America   西欧
                           Western Europe   日本
                                             Japan                                    Profit margin
                                                                                      利益率(コロナ前)                            Profit margin
                                                                                                                           利益率(コロナ後)
                                                                                       (Before COVID-19)                   (After COVID-19)
                                                                            © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.     4
Corporate Vision FY2021-1Q - Management Plan 2. Business Results 3. Company Outline and Topics - Hitachi Construction Machinery
Management Plan
Strengthen development of digital and advanced technologies
Global restructuring of production sites is almost completed
Restructuring domestic production sites and development bases is on-going

                        Initial plan                    Reviewed plan
                                                        Invest 50 billion yen by 2027
                        Invest 42 billion yen by
Investment plan                                         Restructuring functions at Tsuchiura
                        2022
                                                        Works and Ryugasaki Works
Profit contribution
from production-        6 billion yen / year
related restructuring

Development of Collaborative Construction Equipment and accelerate the promotion of
technological development for reducing CO2 emissions R&D expense ratio raised to
4%; Development of bases in Japan, Europe and North America + Open innovation

                           Main research and development themes
                           •   Achieve “Collaborative safety" and advanced autonomous
Achieve collaborative
                               operation system platform "ZCORE"
control between people
                       •       Operation support system
and machinery          •       Site safety
Initiatives for reducing   •   New drive systems such as batteries, fuel cells, hydrogen, etc.
CO2 emissions              •   New technology development for "Net Zero Emissions"
                                                          © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   5
Corporate Vision FY2021-1Q - Management Plan 2. Business Results 3. Company Outline and Topics - Hitachi Construction Machinery
Management Plan
Corporate Strategy

                                                                                                                                                                            Core of Corporate
                                                                                                                                                                                Strategy

                                                                                  Environmental                      Economic
                                           Social value
                                                                                       value                           value
                                                                                                                                                                           Strengthen value
                                                                                Customers                                                                                   chain business
                                              Safety                                Productivity                    Reduction of
                                           improvement                             improvement                      lifecycle cost

                                                                                                                                                                          Provide enhanced
                                                     Means to resolve customer issues                                                                                     solutions at every
                 Focus on main products*

                                                                                Digital/Value chain                                                                          contact with

                                                                                                                                                  Enhance solutions
                                                                                                                                                                              customers
                                            New machinery

                                                            Parts and service

                                                                                   Rental

                                                                                            Used equipment

                                                                                                             remanufacturing
                                                                                                             Parts

                                                                                                                               Finance
                                                                                                                                                                         Form highly flexible
                                                                                                                                                                         corporate structure

                                                                                  Expand value chain

 *Other product group: Backhoe loader, Crawler crane, Bulldozer, Skid-steer loader
                                                                                                                                         © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   6
Corporate Vision FY2021-1Q - Management Plan 2. Business Results 3. Company Outline and Topics - Hitachi Construction Machinery
Strengthen value chain business                             Social value         Management Plan
(Rental and Used equipment)
                                                            Reduction of
                                                            lifecycle cost

 Differentiation by high-quality rental machines and provide bushiness globally
 Expansion as guaranteed and refurbished used equipment

          Expand rental business in various places                     Used equipment with brands

                                             Proper
                                         maintenance by
                                         data utilization

      Distributing high-quality rental machines as used equipment around the world

                                       North
 Europe                      Japan                                 Expand the used equipment business
                                      America
                                                                              sales revenue
               Middle
                east                                              FY2022                                                    FY2030

                                                                  Used equipment                      Adoption of products
                        Southeast                Latin                                                and services that
            Africa                                                280%
                          Asia                  America
                                                                                                      meet regional needs
                                                                   Compared to FY2010

                                                                © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   7
Corporate Vision FY2021-1Q - Management Plan 2. Business Results 3. Company Outline and Topics - Hitachi Construction Machinery
Strengthen value chain business                           Social value         Management Plan
                                                          Reduction of
(Parts & Service)                                         lifecycle cost

 Expanding services with ConSite menu, increasing touch point with customers
 Increasing the choice of service parts for various parts brands
 Strengthening traceability and make parts distribution more efficient

      Expanding services with ConSite
                                                      Customers

                                             Increasing
                                                                                 Strengthening traceability
                                            touch point                        Efficiency in parts distribution

    Selectable from various parts brands

   Expand parts remanufacturing businesses
                 sales revenue                               Life cycle cost reductions
FY2022                                    FY2030   FY2022                                                                 FY2030
                           Adoption of products
Parts remanufacturing and services that meet
                                                   ConSite®                                        Aim for
420%                       regional needs          Adoption rate 90%                               “zero” downtime
        Compared to FY2010

                                                              © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   8
Corporate Vision FY2021-1Q - Management Plan 2. Business Results 3. Company Outline and Topics - Hitachi Construction Machinery
Advancement of construction machinery                           Social value
                                                                   Safety
                                                                                    Management Plan
                                                                                         Productivity
and improvement of safety                                       improvement             improvement

Aiming to realize “the optimal relationship between people and
machinery” by enhancing site safety as a whole through Collaborative
Construction Equipment, operation support systems, and various solutions

 Collaborative Construction Equipment
 Developed "ZCORE", a system platform that realizes both
 Collaborative safety and advanced autonomous operation                                      Prototype
                                                                                              machine

        Operation support system
 Surrounding recognition and automatic braking
 Excavation status judgment and automatic loading
 Operator status monitoring

                                                            Functionality to reduce accidents caused by
                  Site safety
                                                                           HCM products
 Site safety management and risk analysis            FY2022                                                                 FY2030
 Cooperation with disaster information, risk
                                                      Achieve collaborative                          Contribute to
  prediction
                                                      control between people                         "zero" overturn and
                                                      and machinery                                  fatal accidents

                                                                  © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   9
Corporate Vision FY2021-1Q - Management Plan 2. Business Results 3. Company Outline and Topics - Hitachi Construction Machinery
Toward the realization
                                                       Environmental
                                                           value
                                                                       Economic value      Management Plan
of a sustainable society                                                 Productivity
                                                                        improvement

Long-term initiatives for reducing CO2 emissions

                       Compact
   Battery powered
 8t class: Orders for 25 units in FY2020, the target for FY2021 is 50
  units
 5t class: Under evaluation test period, scheduled to be released in
                                                                             Launched in Europe               Under evaluation test
  Japan and Europe in FY2021                                                                                  in the market
                   Construction
   Fuel cell powered    Hydrogen engine             Collaboration with research institutes,
                                                    universities and partner companies

                        Mining
       ABB        All electrification   Improving the efficiency
  collaboration      in the mine          of the entire mine

                                                                         Reducing CO2 emissions from products

                                                                         FY2022                                                     FY2030

   Digital mine promoted by ABB
                                                                              ▲20%
                                                                               Compared to FY2010
                                                                                                                  ▲33%
 Expanding sales of trolley type with ABB electric infrastructure
 Applying ABB Digital Solution to Machines
                                                                         © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   10
Management Plan
Summary of KPI for these three years plan

Realizing Tomorrow’s Opportunities

                                        Previous medium-term plan                   Current medium-term plan
                KPI
                                        FY2019 result                               FY2022 target
Growth          ・Revenue                ・931.3 billion yen                         ・1 trillion yen
                ・Value chain ratio      ・40%                                       ・50%
Profitability   Adjusted operating      8.2%                                       More than 10%
                income ratio
Safety          Net D/E Ratio           0.58                                       Less than 0.5

Efficiency      ROE                     8.6%                                       More than 10%

ESG             Social value            ConSite adoption rate 73%                  ConSite adoption rate 90%
*Compared to    Environmental value     parts remanufacturing                      parts remanufacturing
FY2010
                Economic value          businesses sales revenue                   businesses sales revenue
                                        296%*                                      420%*
                                        Reducing CO2 emissions                     Reducing CO2 emissions
                                        from products -15.9%*                      from products -20%*
Shareholder     Dividend payout ratio   31%                                        30% or more
return

                                                             © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   11
Management Plan

© Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   12
Business Results

Corporate Vision
FY2021-1Q

1. Management Plan
2. Business Results
3. Company Outline and Topics

                                © Hitachi Construction Machinery Co., Ltd. 2019. All rights reserved.   13
Business Results

Explanatory Meeting
for Business Results for the First Quarter ended June 30, 2021

     Hidehiko Matsui
     Executive Officer, President, Marketing Div.

     Keiichiro Shiojima
     Executive Officer, CFO

                                                    © Hitachi Construction Machinery Co., Ltd. 2019. All rights reserved.   14
Business Results

1. Regional Market Environments and Projections

Hidehiko Matsui
Executive Officer, President, Marketing Div.

                                               © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   15
Business Results
 Global Demand Trend for Hydraulic Excavators

                    Emerging Markets ratio :
                                                                                                          Year-on-Year Change by Region
                  FY2021 : 56% ( y-y Change : -5% )
[K units]
(千台)          ※Emerging Markets: China, Asia/Oceania, and others                                           ※Estimates by HCM, Excluding Chinese manufacturers
                                                                                                           ※Distributing, copying, or forwarding prohibited
  250
                                           236              237
                                                                                                                                            '20          '21
                                  220                                220 220
  225                                              217                                                        Total                         +9%           -7%
                                            60
                                                                                                              China                       +42%           -30%
  200                                                        69
            183                     54              49               53      48                                 Russia,CIS,
                          173                                                         中国
                                                                                      China                                                  -7%          +0%
  175
                                                                                                                E Europe
            30                                                                                                  Africa                    +10%           -10%
                   155                      24
                           30                       25                       27
                                    24                       28      25
  150                                                                                 その他
                                                                                      Others                    Middle East               +10%            +0%
                    19
            32             19                                                                                   Latin                     +34%             -0%
  125               24                      53      43
                                    49                       47      48      47
                                                                                      アジア・大洋州
                                                                                      Asia & Oceania          Others                      +11%             -2%
  100
            32             41                                                         *Incl. India              Asia                      +12%            +5%
                    32
                                                    35
                                                                                                                India                       +5%            -4%
                                    29
                                            33
                                                                     32      35       北米
                                                                                      North America
   75       27                                               33
                    26
                           25                                                                                   Oceania                   +16%             -1%

   50
                                                                                                              Asia & Oceania                +9%           +1%
            31                      38      42      40       35      36      36       西欧
                                                                                      Western Europe
                    30     35                                                                                 N America                      -6%          +8%
   25                                                                                                         W Europe                     -13%           +3%
            31
                    24     23       25      24      25       26      26      26       Japan
                                                                                      日本                      Japan                         +3%           +0%
    0
     FY '14        '15     '16      '17     '18     '19     '20      '21     '21
                                                                   Previous Current
                                                                   Outlook Outlook              © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   16
Business Results
 Japan: First Quarter ( from April to June 2021 )

       Housing investment and public investment increased. Capital investment improved at the level of the last FY.
       Demand increased: Hydraulic excavators +6% y-y, Mini excavators +2% y-y, Wheel loaders +17% y-y,
        respectively.

   Market Environment Housing/Public Spending and Capex (y-y)                          [K units]     Demand Trend for Mini Excavators
40%                                                                                   20                                                                                   100%
              Public spending            *Source: MLIT, Cabinet Office, and                                                                     *Estimates by HCM
              (Public work orders)           Construction Surety Company
20%                                                                                   15                                                                                   50%

 0%                                                                                   10                                                                                   0%

            Capex
                                         New housing starts
-20%                                                                                   5                                                                                   -50%
            (Orders for machinery,
            excluding foreign demands)   (number of houses)
-40%                                                                                   0                                                                                   -100%

                                                                                           FY14/1Q
                                                                                                2Q
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            2Q
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            4Q

[K units]       Demand Trend for Hydraulic Excavators                                 [K units]       Demand Trend for Wheel Loaders

 20                                                                           100%    20                                                                                   100%
                                                   *Estimates by HCM                                                                             *Estimates by HCM

 15                                                                           50%     15                                                                                   50%

 10                                                                           0%      10                                                                                   0%

  5                                                                           -50%     5                                                                                   -50%

  0                                                                           -100%    0                                                                                   -100%
       FY14/1Q
            2Q
            3Q
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                                                                                                   © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   17
Business Results
  Europe: First Quarter ( from April to June 2021 )

      Throughout the Eurozone, GDP growth rates have been on an improving trend.
      Demand increased significantly: Hydraulic excavators +33% y-y, Mini excavators +33% y-y, Wheel loaders
       +32% y-y, respectively.

            GDP Growth Rate in Major Countries (y-y)                            [K units]   Demand Trend for Mini Excavators
10%                                                                             25                                                                         100%
                                                                                                                                  *Estimates by HCM
                                                                        UK                                                                                            Others
  5%
                                                                                20
                                                                                                                                                           50%
  0%                                                                                                                                                                  Germany
                                                                      Germany   15
-5%                                                                                                                                                                    Italy
                                                                                                                                                           0%
-10%                                                                            10
                                                                      France                                                                                          France
-15%                                                                                                                                                       -50%
                                                                                 5                                                                                      UK
-20%                                                               EUR zone
                                    * Source: Eurostat
-25%                                                                             0                                                                         -100%

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                                                                                                                                                              (E)

[K units]    Demand Trend for Hydraulic Excavators                              [K units]   Demand Trend for Wheel Loaders
20                                                         100%                 20                                                                         100%
                                       *Estimates by HCM                                                                         *Estimates by HCM
                                                                       Others                                                                                         Others
15                                                         50%                  15                                                                         50%
                                                                      Germany                                                                                         Germany

10                                                         0%           Italy   10                                                                         0%          Italy

                                                                       France                                                                                         France
 5                                                         -50%                  5                                                                         -50%
                                                                         UK                                                                                             UK
 0                                                         -100%                 0                                                                         -100%
                                                                                      FY14/1Q
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                                                                (E)                                                                                             (E)
                                                                                            © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.       18
Business Results
 North America: First Quarter ( from April to June 2021 )

   Housing starts and construction spending in residential were upward trend. Non-residential and public
    work remained at the same level of the previous year.
   Demand significantly increased: Hydraulic excavators +37% y-y, Mini excavators +28% y-y, respectively.
 [K units]   GDP Growth Rate, Housing Starts in US                         [K units]   Demand Trend for Hydraulic Excavators
2000                                                                 35% 20                                                                                      100%
                 * Bureau of Economic Census, US Census Bureau                                                                      *Estimates by HCM
                                                                     25%
                      GDP (y-y/Right axis)
                                                                     15% 15                                                                                      50%
1500
                                                                     5%
                                                                           10                                                                                    0%
                                                                     -5%
1000
                         Housing starts (Left axis)                  -15% 5                                                                                      -50%
                             (Seasonally adjusted)                   -25%
500                                                                  -35% 0                                                                                      -100%
              2Q
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                                                                                                                                                                (E)

               Construction Spending in US (y-y)                           [K units]      Demand Trend for Mini Excavators

150%                                                                       20                                                                                   100%
                                                                                                                                   *Estimates by HCM
               Residential        Non-residential      Public
                                                                           15                                                                                   50%
125%

                                                                           10                                                                                   0%
100%
                                                                            5                                                                                   -50%
                     * Bureau of Economic Census, US Census Bureau
 75%
                                                                            0                                                                                   -100%
                  2Q
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             CY20/1Q

             CY21/1Q

                                                                                 FY14/1Q
                                                                                      2Q
                                                                                      3Q
                                                                                      4Q
                                                                                 FY15/1Q
                                                                                      2Q
                                                                                      3Q
                                                                                      4Q
                                                                                 FY16/1Q
                                                                                      2Q
                                                                                      3Q
                                                                                      4Q
                                                                                 FY17/1Q
                                                                                      2Q
                                                                                      3Q
                                                                                      4Q
                                                                                 FY18/1Q
                                                                                      2Q
                                                                                      3Q
                                                                                      4Q
                                                                                 FY19/1Q
                                                                                      2Q
                                                                                      3Q
                                                                                      4Q
                                                                                 FY20/1Q
                                                                                      2Q
                                                                                      3Q
                                                                                      4Q
                                                                                 FY21/1Q
                                                                                                                                                               (E)

                                                                                       © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.          19
Business Results
  China: First Quarter ( from April to June 2021 )

     ■The GDP growth rate was +7.9%.
     ■Demand for hydraulic excavators in China decreased. -37% y-y, Foreign manufactures only.

                 GDP and Fixed Asset Investment                             [%]        Quarterly Demand for Hydraulic Excavators by Region (y-y)
                                                                    (y-y)                                                                          *Estimates by HCM
30%                                                                          20
                                                                                         FY20         2Q        3Q         4Q        1Q            *Foreign manufactures only
             left axis                                right axis
             Accumulated Fixed Asset               GDP (+7.9%)               15       North East     +112        +27        +98     -31% [%]
20%
             Investment (y-y) (+12.6%)                                       10       North            +40       +23        +76     -20%
                                                                             5        East             +57       +36        +42     -42%
10%
                                                                             0        Central
                                                                                                       +22       +22        +70     -42%
                                                                                      South
 0%                                                                          -5
                                                                                      North West
             2Q
             3Q
             4Q

             2Q
             3Q
             4Q

             2Q
             3Q
             4Q

             2Q
             3Q
             4Q

             2Q
             3Q
             4Q

             2Q
             3Q
             4Q

             2Q

             2Q
        CY14/1Q

        CY15/1Q

        CY16/1Q

        CY17/1Q

        CY18/1Q

        CY19/1Q

        CY20/1Q

        CY21/1Q
                                                                                                       +64       +27        +68     -42%

            3Q
            4Q
                                                                             -10
-10%                                                                                  South West       +21       +26        +25     -35%
                                                                             -15      Total           +40        +28       +53 -37%
                                * National Bureau of Statistics of China
-20%                                                                         -20

             Demand Trend for Hydraulic Excavators                                 Demand Composition by Class for Mini Excavators and Hydraulic Excavators
                                                      *Estimates by HCM                            *Estimates by HCM *Foreign manufactures only
 [K units]   y-y comparison data is limited to foreign manufactures only                                                                                                40t-
                                                                                      100%
   80                                                                        150%                                                                                     30-39t
                                                                                                                                                            20t
   70         Domestic                                                                 80%
                                                                                                                                                            and       21-29t
   60         Foreign                                                        100%
                                                                                                                                                            over
   50
                                                                                       60%                                                                                  20t
                                                                             50%
   40                                                                                                                                                                 10-15t
                                                                                       40%
   30                                                                        0%
                                                                                                                                                            20t        6-10t
   20                                                                                  20%                                                                 below
                                                                             -50%
   10                                                                                                                                                                   -6t
    0                                                                        -100%      0%
                                                                                              FY16/1Q
                                                                                                   2Q
                                                                                                   3Q
                                                                                                   4Q
                                                                                              FY17/1Q
                                                                                                   2Q
                                                                                                   3Q
                                                                                                   4Q
                                                                                              FY18/1Q
                                                                                                   2Q
                                                                                                   3Q
                                                                                                   4Q
                                                                                              FY19/1Q
                                                                                                   2Q
                                                                                                   3Q
                                                                                                   4Q
                                                                                              FY20/1Q
                                                                                                   2Q
                                                                                                   3Q
                                                                                                   4Q
                                                                                              FY21/1Q
         FY14/1Q
              2Q
              3Q
              4Q
         FY15/1Q
              2Q
              3Q
              4Q
         FY16/1Q
              2Q
              3Q
              4Q
         FY17/1Q
              2Q
              3Q
              4Q
         FY18/1Q
              2Q
              3Q
              4Q
         FY19/1Q
              2Q
              3Q
              4Q
         FY20/1Q
              2Q
              3Q
              4Q
         FY21/1Q

                                                                                                    © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.         20
Business Results
  Supplemental Information: China ( from April to June 2021 )

 [K units]                                                                                                                                                                                                              *Estimates by HCM
15                                     Monthly Demand Trend for Hydraulic Excavators (Foreign Manufactures only)                                                                                                                       250%
                                                                                                                                                                                                                                                  200%
                y-y
                                                                                                                                                                                                                                                  150%
10
                                                                                                                                                                                                                                                  100%
                                                                                                                                                                                                                                                  50%

 5                                                                                                                                                                                                                                                0%
                                                                                                                                                                                                                                                  -50%
                                                                                                                                                                                                                                                  -100%
 0   +102% +100% +45% +55% +11%                                                   -9%          -2%         -19%          -10%            -8%           -31%          +45% +40% +28% +53% -37%
                                                                                                                                                                                                                                                  -150%
     Apr. 5月
     4月   May.6月
              Jun. 7月
                    Jul. Aug.
                         8月 9月Sep. Oct.
                                   10 Nov. Dec.1月
                                        11 12  Jan. 2月
                                                    Feb.3月  Apr. 5月
                                                        Mar.4月   May.6月
                                                                      Jun.7月
                                                                           Jul. 8月
                                                                                Aug.9月
                                                                                    Sep.Oct.
                                                                                        10 No.
                                                                                             11 Dec.
                                                                                                 12 Jan.
                                                                                                     1月Feb.
                                                                                                         2月Mar. Apr. May.
                                                                                                            3月 4月    5月 6月Jun. 7月
                                                                                                                                Jul. Aug.
                                                                                                                                     8月 9月Sep. Oct.
                                                                                                                                               10 Nov.
                                                                                                                                                    11 Dec.
                                                                                                                                                       12 1月Jan. 2月
                                                                                                                                                                 Feb.3月
                                                                                                                                                                     Mar.Apr.
                                                                                                                                                                        4月 5月 May.6月
                                                                                                                                                                                  Jun. 7月
                                                                                                                                                                                        Jul. Aug.
                                                                                                                                                                                             8月 9月Sep. Oct.
                                                                                                                                                                                                       10 Nov. Dec.1月
                                                                                                                                                                                                            11 12  Jan. 2月
                                                                                                                                                                                                                         Feb.3月  Apr. 5月
                                                                                                                                                                                                                             Mar.4月   May.6月
                                                                                                                                                                                                                                           Jun.

                               FY2017                                                 FY2018                                                FY2019                                             FY2020
                                 月 月 月                                                  月 月 月                                                  月 月 月                                                  月 月 月
                                                                                                                                                                                                                                       FY2021
 [K units]                                Demand Trend for Hydraulic Excavators (y-y) (Foreign Manufactures only)
      16                                                                                                                                                                                                   *Estimates by HCM

      14                                  FY2018 Actual
                                         2018年度
                                                                                                                                                                                                                     [Chinese New Year]
                                          FY2019 Actual
                                         2019年度
      12                                                                                                                                                                                                                Feb. 5, 2019
                                          FY2020 Actual
                                         2020年度
                                                                                                                                                                                                                        Jan. 25, 2020
      10                                  FY2021 Actual
                                         2021年度
                                                                                                                                                                                                                        Feb. 12, 2021
        8
                                                                                                                                                                                                                        Feb. 1, 2022
        6
        4
        2
        0
                  Apr.              May.            Jun.            Jul.             Aug.            Sep.            Oct.            Nov.            Dec.        Jan.        Feb.     Mar.
                    4月              5月              6月              7月               8月              9月             10月             11月             12月          1月
                                                                                                                                                     © Hitachi Construction  2月 Co.,
                                                                                                                                                                            Machinery  3月
                                                                                                                                                                                        Ltd. 2021. All rights reserved.                           21
Business Results
Asia Oceania, and India: First Quarter ( from April to June 2021 )

      Demand for hydraulic excavators increased overall in the Asia Pacific region, +57%.
      Demand for hydraulic excavators in India was +107%.

     Demand Trend for Hydraulic Excavators in Asia & Oceania             [%]                      GDP Growth Rate in Major Countries (y-y)
[K units]                                                                                                                                                                * Source: IMF, etc
                                                                         15                                                Indonesia                            India
10                                                          100%
                                      *Estimates by HCM                  10
                                                                          5
                                                                          0
                                                            50%           -5                 Thailand
8                                                                                                                                                              Singapore
                                                                         -10
                                                                         -15
                                                                         -20                                                                                    Malaysia
                                                            0%
                                                                         -25
6

                                                                                   CY14/1Q

                                                                                                  CY15/1Q

                                                                                                                 CY16/1Q

                                                                                                                                 CY17/1Q

                                                                                                                                                CY18/1Q

                                                                                                                                                               CY19/1Q

                                                                                                                                                                                CY20/1Q

                                                                                                                                                                                               CY21/1Q
                                                                                             3Q

                                                                                                            3Q

                                                                                                                            3Q

                                                                                                                                           3Q

                                                                                                                                                          3Q

                                                                                                                                                                          3Q

                                                                                                                                                                                          3Q
                                                            -50%               ※ Calculation criteria for GDP growth rate in India was revised in CY2013 2Q
                                                                Others
                                                                                             Demand Trend for Hydraulic Excavators in India
4
                                                                 NZ       [K units]                                                                                      *Estimates by HCM
                                                            -100%
                                                            Australia          8
                                                                               7                                                                                                                          100%
                                                            Thailand           6
2                                                                                                                                                                                                         50%
                                                           Singapore           5
                                                            -150%
                                                                               4                                                                                                                          0%
                                                            Malaysia           3
                                                                               2                                                                                                                          -50%
                                                           Indonesia
                                                                               1
0                                                           -200%
                                                                               0                                                                                                                          -100%
      FY14/1Q
           2Q
           3Q
           4Q
      FY15/1Q
           2Q
           3Q
           4Q
      FY16/1Q
           2Q
           3Q
           4Q
      FY17/1Q
           2Q
           3Q
           4Q
      FY18/1Q
           2Q
           3Q
           4Q
      FY19/1Q
           2Q
           3Q
           4Q
      FY20/1Q
           2Q
           3Q
           4Q
      FY21/1Q

                                                                                       FY14/1Q
                                                                                            2Q
                                                                                            3Q
                                                                                            4Q
                                                                                       FY15/1Q
                                                                                            2Q
                                                                                            3Q
                                                                                            4Q
                                                                                       FY16/1Q
                                                                                            2Q
                                                                                            3Q
                                                                                            4Q
                                                                                       FY17/1Q
                                                                                            2Q
                                                                                            3Q
                                                                                            4Q
                                                                                       FY18/1Q
                                                                                            2Q
                                                                                            3Q
                                                                                            4Q
                                                                                       FY19/1Q
                                                                                            2Q
                                                                                            3Q
                                                                                            4Q
                                                                                       FY20/1Q
                                                                                            2Q
                                                                                            3Q
                                                                                            4Q
                                                                                      FY21/1Q
                                                          (E)
                                                                                                                                                                                                         (E)

                                                                                                     © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.                                     22
Business Results
  Russia and Middle East: First Quarter ( from April to June 2021 )

     Demand for hydraulic excavators in Russia was +38%.
     Demand for hydraulic excavators in the Middle East was +23%.

                   Foreign Exchange Rate of the Ruble                                    [K units]      Demand Trend for Hydraulic Excavators in Russia
                                                                                               5                                                                             200%
                                                                                                                                         *Estimates by HCM
                                                                                               4                                         *Ex-Works base                      150%
  0.03
                                                                                                                                         * Incl. Local manufacturing
                                                                                                                                                                             100%
                                                      Against US$                              3
  0.02                                                                                                                                                                       50%
                                                                                               2
                                                                                                                                                                             0%

  0.01                                                                                         1                                                                             -50%
                                                   Against EUR€
                                                                                               0                                                                             -100%

                                                                                                      FY14/1Q
                                                                                                           2Q
                                                                                                           3Q
                                                                                                           4Q
                                                                                                      FY15/1Q
                                                                                                           2Q
                                                                                                           3Q
                                                                                                           4Q
                                                                                                      FY16/1Q
                                                                                                           2Q
                                                                                                           3Q
                                                                                                           4Q
                                                                                                      FY17/1Q
                                                                                                           2Q
                                                                                                           3Q
                                                                                                           4Q
                                                                                                      FY18/1Q
                                                                                                           2Q
                                                                                                           3Q
                                                                                                           4Q
                                                                                                      FY19/1Q
                                                                                                           2Q
                                                                                                           3Q
                                                                                                           4Q
                                                                                                      FY20/1Q
                                                                                                           2Q
                                                                                                           3Q
                                                                                                           4Q
                                                                                                     FY21/1Q
       0
       FY13      FY14      FY15    FY16        FY17    FY18      FY19      FY20                                                                                             (E)
           * According to HCM’s research

[Crude oil                                                                 [Natural Gas
                Price Trend of Crude Oil and Natural Gas                   Index]      [K units]
                                                                                                     Demand Trend for Hydraulic Excavators in the Middle East
 US$]
140                                                                                140         5
                                                         Natural gas
                                                                                                                                                                            100%
                                                                                                        *Estimates by HCM
120                                                                                120
                                                               (right scale)                   4
                                                                                                        *Ex-Works base
                                                                                                        (Turkey: retail-sales base)                                         50%
100                                                                                100                                                                                               Others
  80                                                                               80          3
                                                                                                                                                                            0%        UAE
  60                                                                               60          2                                                                                     Saudi
                                                                                                                                                                                     Arabia
  40                                                                               40                                                                                       -50%
  20
           Crude oil                                                               20
                                                                                               1                                                                                     Turkey
           (left scale)
   0                                                                           0               0                                                                            -100%
                                                                                                      FY14/1Q
                                                                                                           2Q
                                                                                                           3Q
                                                                                                           4Q
                                                                                                      FY15/1Q
                                                                                                           2Q
                                                                                                           3Q
                                                                                                           4Q
                                                                                                      FY16/1Q
                                                                                                           2Q
                                                                                                           3Q
                                                                                                           4Q
                                                                                                      FY17/1Q
                                                                                                           2Q
                                                                                                           4Q
                                                                                                      FY18/1Q
                                                                                                           2Q
                                                                                                           3Q
                                                                                                           4Q
                                                                                                      FY19/1Q
                                                                                                           2Q
                                                                                                           3Q
                                                                                                           4Q
                                                                                                      FY20/1Q
                                                                                                           2Q
                                                                                                           3Q
                                                                                                           4Q
                                                                                                     FY21/1Q
                                                                                                          3Q
   FY13        FY14       FY15    FY16     FY17       FY18      FY19       FY20
                                                                                                                                                                           (E)
   * Created by HCM, sourced from World Bank    * Natural Gas Index (2010 = 100)
                                                                                                             © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.    23
Business Results
Mining machinery: FY2021 ( from April 2021 to March 2022 )

   Demand forecast for mining machinery in FY2021 is expected to increase +15% y-y.
   Demand from hard-rock mines has been solid. Demand for hydraulic excavator over 100t increased for
    small and medium sized mines and constructors.

                 Ultra-large Hydraulic Excavators (over 100t), Dump Trucks(over 150t)
[Units]                 Demand by product                          [Units]                     Demand by region

 2,000                                                             2,000
                    Dump Trucks(over 150t)                                    Central and South America
                    Ultra-large Hydraulic Excavators(over 100t)
                                                                              North America

                                                                              Europe Russia CIS
 1,500                                                             1,500
                                                                              Oceania

                                                                              Asia

                                                                              Africa and Middle East
 1,000                                                             1,000

   500                                                              500

     -                                                                 0
          FY14   FY15    FY16   FY17   FY18   FY19   FY20   FY21             FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21

          ※ According to HCM’s research
                                                                               © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   24
Business Results
Supplementary Information: BB Ratio

                             BB Ratio (Ultra-large Hydraulic Excavators, over 100t)

                                             BB Ratio (Dump trucks, over 150t)

   * Book-to-Bill(BB) Ratio = Bookings (Orders received)/Billings (Value of shipment )
     Non-consolidated basis (average of 6 months)

                                                                                         © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   25
Business Results

2. Business Results for the First Quarter ended June 30, 2021
(April 1, 2021 - June 30, 2021)

      Keiichiro Shiojima
      Executive Officer, CFO

                                          © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   26
Business Results
Summary of consolidated results

In the first quarter of the current fiscal year, despite the impact of COVID-19, revenue
increased by 34% y-y and adjusted operating income increased by 303%, partly due to the
impact of yen depreciation of 14.5 billion yen.
                                                                                                                                                            [billions of yen]

                                                                            FY2021                                     FY2020
                                                                                                                                                           change
                                                                              1Q                                         1Q

Revenue                                                                                      228.1                                         170.2                       34%

Adjusted operating income *1                                             5.2%                  11.8                1.7%                        2.9                   303%

Operating income                                                         5.2%                  11.9                1.5%                        2.5                   374%

Income before income taxes                                               5.3%                  12.0                1.1%                        1.8                   572%
Net income attributable to
owners of the parent                                                     3.1%                    7.1               0.1%                        0.2                           -

EBIT *2                                                                  5.5%                  12.7                1.6%                        2.7                   369%

             Rate (YEN/US$)                                                                  109.5                                         107.6                           1.9
             Rate (YEN/EURO)                                                                 132.0                                         118.5                       13.5
FX rate
             Rate (YEN/RMB)                                                                    17.0                                          15.2                          1.8
             Rate (YEN/AU$)                                                                    84.3                                          70.7                      13.7
*1 "Adjusted operating income" is calculated by excluding "Other income" and "Other expenses" from "Operating Income" listed in Consolidated Statements of Income.
*2 "EBIT" stands for Earnings Before Interests and Taxes, and is calculated by excluding "Interest income" and "Interest expenses" from “Income before income taxes”

                                                                                                   © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.     27
Business Results
Revenue by geographic region (consolidated)

Revenue increased in each region except China y-y; consolidated revenue
increased by 58.0 billion yen.
                                                                                                              [billions of yen]

                         FY2021               FY2020                                             change
                           1Q                   1Q                                  amount                          %
Japan                    43.2      19%        39.9                   23%                           3.3                       8%
Asia                     16.3       7%         9.2                     5%                          7.1                   77%
India                     9.9       4%         4.8                     3%                          5.1                 107%
Oceania                  39.7      17%        33.1                   19%                           6.6                   20%
Europe                   31.4      14%        13.5                     8%                        17.9                  132%
N.America                42.1      18%        27.9                   16%                         14.2                    51%
L.America                 4.7       2%         2.8                     2%                          1.9                   67%
Russia-CIS                7.6       3%         4.3                     3%                          3.3                   77%
M.East                    6.5       3%         3.3                     2%                          3.2                   95%
Africa                    9.3       4%         6.2                     4%                          3.1                   49%
China                    17.5       8%        25.1                   15%                          -7.5                  -30%
Total                   228.1     100%       170.2                 100%                          58.0                    34%
Overseas ratio          81%                   77%

                                                     © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.    28
Business Results
Mining revenue

Revenue of mining in FY2021 1Q increased by 18% to 34.1 billion yen y-y, partly due to
the impact of depreciation of the yen, which accounted for 3.2 billion yen.
                                                                %      shows sales ratio against total company sales

[billions of yen]                                              [ % ] shows changed ratio from the same period of
                                                                     previous year

                                            16%      18%

                                      14%
                    15%         16%                               15%
                          15%

                                                                                    15%                                 17%
                                                                                               [ 18%]      Machine
                                                                                                           Total
                                                                                               [ △60%]
                                                                                                           [ △1%]
                                                                                               [ 29%]

                                                                                                [ 28%]

                                                        © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   29
Business Results
 Value          chain*1       revenue

   Revenue of the value chain business in FY2021 1Q increased by 20% to 95.0 billion yen y-y,
   partly due to the impact of depreciation of the yen, which accounted for 7.0 billion yen.

[billions of yen]                                                                                         %     shows sales ratio against total company sales

                                                                                                        [ % ] shows changed ratio from the same period of

                                     40%                   39%                                                previous year
                          (*2)
                                                                               41%
                                                                                                     43%

                    35%

                                                                                                                                42%                           46%
                                                                                                                                           [ 20%]

                                                                                                                                           [ 24%]
                                                                                                                                           [ 18%]
                                                                                                                                             [ 9%]
                                                                                                                                           [ 25%]
                                                                                                                                                     [ 26%]
                                                                                                                                           [ 28%]

        (*1) Value chain: Total of Parts & services, Solution business, Rental etc. other than new machine sales.
        (*2) Solution business: The business segment primarily intends to provide development, production, distribution of parts and service solutions for
            mining facilities and equipment after the sales made that are not included in the construction machinery business segment.
                                                                                               © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   30
Business Results
Comparison of consolidated income

Adjusted operating income increased by 8.9 billion yen y-y due to the impact of increased sales
volume and model mix, despite increased overheads.

[billions of yen]

                                                                                                                                            Increase of expense linked to
         20         Sales Volume                     16.5                                                                                   production and sales          -2.1
                    Model mix of value chain business 1.7                                                                                   Decrease of general overheads 1.4
         18         Other model mix                  -7.0                                                                                   Increase of expense for sustained
                                                                                                                                            growth                         -3.6
         16

         14                                     10.0 -0.7                                                                                                                                                                                                         0.2
                                                                                                    -0.3 -4.2                               4.2                      11.8                                                                                                                              0.3 11.9
                    2.9                                                                                                                                                                                                          8.9
                                                 Sales volume, model mix & others

                                                                                    Selling price

                                                                                                                                                                                                                                                                  Expenses related structural reform
         12
                                                                                                     Material cost

                                                                                                                                            Foreign exchange rate
                                                                                                                           Overhead

                                                                                                                                                                                                                                                                                                       expenses
                                                                                                                                                                                                                                                                                                       Other operating income and
                                                                                                                                                                       Adjusted operating income

                                                                                                                                                                                                                                 income
                                                                                                                                                                                                                                 variance of adjusted operating
                    Adjusted operating income

         10

                                                                                                                                                                                                                                                                                                                                       Operating income
          8
                                                                                                                                                                                                           2.5

                                                                                                                                                                                                             Operating income
          6
                                                                                                                     US$              0.3
          4
                                                                                                                     EUR              1.3
                                                                                                                     RMB              0.7
                                                                                                                     AU$              0.9
          2

          0
                    FY20                                                                                                                                              FY21                                 FY20                                                                                                                       FY21
               1Q Actual                                                                                                                                            1Q Actual                            1Q Actual                                                                                                                  1Q Actual
                                                Total variance excluding FX effect 4.7

                                                                                                                                                                                                   © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.                                                                                  31
Business Results
Consolidated statement of income

SG&A expenses increased by 7.6 billion yen to 44.2 billion yen y-y.

                                                                                                                                                    [billions of yen]

                                                                  FY2021                         FY2020                                     change
                                                                    1Q                             1Q                             amount                    %
Revenue                                                                          228.1                            170.2                    58.0             34%
Cost of Sales                                                  (75.4%)           172.1       (76.7%)              130.6                    41.5             32%
SGA expenses                                                   (19.4%)             44.2      (21.5%)                 36.6                   7.6             21%
Adjusted operating income *1                                    (5.2%)             11.8       (1.7%)                  2.9                   8.9            303%
Other Income/expenses                                                               0.1                              -0.4                   0.5                    -
Operating income                                                (5.2%)             11.9       (1.5%)                  2.5                   9.4            374%
Financial income/expenses                                                          -1.1                              -0.8                  -0.2             29%
Share of profits of investments
accounted for using the equity method                                               1.2                                0.1                  1.1                    -
Income before income taxes                                      (5.3%)             12.0       (1.1%)                   1.8                 10.2            572%
Income taxes                                                                        4.2                                0.6                  3.6            602%
Net income                                                      (3.4%)              7.8       (0.7%)                   1.2                  6.7            557%
Net income attributable to
owners of the parent                                            (3.1%)               7.1      (0.1%)                   0.2                    6.9                  -
 *1 “Adjusted operating income” is calculated by excluding “Other income” and
  “Other expenses” from “Operating Income” listed in Consolidated Statements of Income.
                                                                                           © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   32
Summary of quarterly consolidated revenue and                                                                                     Business Results
operating income (ratio)

                                                                                                                                                                            [billions of yen]
                                                             2018                                      2019                                          2020                             2021
                                              1Q           2Q     3Q          4Q         1Q          2Q     3Q            4Q          1Q           2Q    3Q                 4Q         1Q
Revenue                                       240.2        250.2     252.8    290.5      234.7       245.9     206.6      244.2       170.2        190.7         197.8      254.6       228.1
Adjusted operating income                         27.6      25.8      31.8     31.7          22.9     22.1      13.8       17.9         2.9           8.0          7.4         14.4      11.8
Operating income                                  25.7      24.8      30.8     21.0          23.7     19.6      14.1       15.5         2.5           6.0          6.7         13.0      11.9
       [billions of yen]
     450.0                                                                                                                     Revenue                                                15.0%
               11.5%                    12.6%
                           10.3%                         10.9%                                                                 Adjusted operating income Ratio
     400.0                                                         10.1%
                                                                             9.0%                                              Operating income Ratio
                                      12.2%                                                                                                                                           10.0%
                 10.7%                                                                   6.8%        7.3%
     350.0                   9.9%                                  9.8%                                                                                 5.7%             5.2%
                                                         7.2%                8.0%                                            4.2%       3.7%
     300.0                                                                              6.7%                     1.7%                                                                 5.0%
                                                                                                     6.3%                                                   5.1%
                                                                                                                                                                          5.2%
     250.0                                                                                                                     3.2%        3.4%
                                                                                                                1.5%                                                                  0.0%
     200.0

     150.0                                                                                                                                                                            -5.0%

     100.0
                                                                                                                                                                                      -10.0%
      50.0
                 240.2       250.2          252.8        290.5      234.7    245.9           206.6    244.2      170.2       190.7          197.8       254.6            228.1
       0.0                                                                                                                                                                            -15.0%
                  1Q          2Q             3Q           4Q         1Q        2Q             3Q       4Q          1Q          2Q             3Q            4Q            1Q

                                     2018                                             2019                                           2020                                2021

                                                             2018                                      2019                                          2020                              2021
             FX rate
                                              1Q           2Q     3Q          4Q         1Q          2Q     3Q            4Q          1Q           2Q    3Q                 4Q          1Q
Rate (YEN/US$)                                 109.1       111.5     112.9    110.2          109.9   107.4     108.8      108.9       107.6         106.2        104.5      105.9       109.5
Rate (YEN/EURO)                                130.1       129.6     128.8    125.2          123.5   119.3     120.3      120.1       118.5         124.1        124.5      127.7       132.0
Rate (YEN/RMB)                                    17.1      16.4      16.3     16.3           16.1    15.3      15.5       15.6        15.2          15.4         15.8         16.4      17.0
Rate (YEN/AU$)                                    82.6      81.5      81.1     78.5           76.9    73.6      74.3       71.8        70.7          75.9         76.3         81.8      84.3
                                                                                                              © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.           33
Business Results
Consolidated statement of financial position

Total current assets decreased by 4.8 billion yen y-y due to a decrease of 16.0 billion yen in
trade receivables.

                                                                                                                                                            [billions of yen]
                                     (A)     (B)       (C)         (A)-(B)                                           (D)      (E)      (F)                        (D)-(E)
                                   FY21-1Q Mar '2021 FY20-1Q       change                                          FY21-1Q Mar '2021 FY20-1Q                      change
 Cash and cash equivalents             72.7      80.3      71.0        -7.7    Trade and other payables                191.9           199.2           166.6               -7.3
 Trade receivables                    195.2     211.2     176.2       -16.0    Bonds and borrowings                    328.3           329.5           343.9               -1.2
 Inventories                          308.3     297.8     310.3        10.5    Total liabilities                       646.8           651.3           626.5               -4.5
                                                                               (Equity attributable to owners of
 Total current assets                 612.3     617.2     593.3        -4.8     the parent ratio)                     (42.6%)        (42.1%)         (41.2%)          (0.5%)
 Total non-current assets             612.2     603.4     562.6         8.8    Total equity                            577.7           569.2           529.4                8.5
 Total assets                        1,224.5   1,220.6   1,155.9        4.0    Total liabilities and equity          1,224.5         1,220.6         1,155.9                4.0
 Trade receivables incl.
 non-current                          236.0     252.7     215.3       -16.6
 Inventories by products
 Unit                                  84.4      77.3      83.5         7.1                                           (26.8%)        (27.0%)         (29.8%)         (-0.2%)
 Parts                                104.3     102.3     108.4         2.0    Interest-bearing debt                   328.3           329.5           343.9               -1.2
Raw materials, WIP and etc            119.6     118.2     118.4         1.3    Cash and Cash equivalents                 72.7           80.3            71.0               -7.7
 Total inventories                    308.3     297.8     310.3        10.5    Net interest-bearing debt              (20.9%)        (20.4%)         (23.6%)          (0.5%)
On hand days(divided by revenue)                                      (Days)   Debt                                    255.6           249.2           272.9                6.4
 Trade receivables                       99       113        91        -14
 Inventories                            129       134       131         -5     Net D/E Ratio                             0.49           0.48            0.57               0.01
 Trade payables                          47        49        40         -3
 Net working capital                    178       194       178        -16

                                                                                                   © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.      34
Business Results
Consolidated cash flow

Net cash provided by (used in) operating activities increased to a positive 6.7 billion yen.

                                                                                                                         [billions of yen]

                                                        FY2021                    FY2020
                                                                                                                    change
                                                          1Q                        1Q
 Net income                                                       7.8                              1.2                                6.7
 Depreciation and amortization                         21.2      13.3          12.9              11.8              8.2                1.6
 (Increase)decrease in trade/lease receivables                   18.6                            41.9                             -23.3
 (Increase)decrease in inventories                            -10.3                               -2.8                              -7.5
 Increase(decrease) in trade payables                   9.1       0.9          19.9             -19.2          -10.7               20.1
 Others, net                                                  -23.6                             -11.4                             -12.3
 Net cash provided by (used in) operating activities              6.7                            21.4                             -14.8
 Cash flow margin for operating activities                    2.9%                           12.6%                              -9.7%
 Net cash provided by (used in) investing activities             -8.2                             -9.3                                1.1
 Free cash flows                                                 -1.5                            12.2                             -13.7
 Net cash provided by (used in) financing activities             -6.6                             -4.3                              -2.3

                                                                  © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.     35
Business Results
Summary of consolidated earnings forecast

 FY2021 Consolidated Statement of Income is expected to be the same as the previous forecast.

                                                                                                                                                      [billions of yen]

                                                         FY2021                                  FY2020                                        change
                                                         Forecast                                 Actual                           amount                      %

Revenue                                                                   880.0                                      813.3                  66.7                     8%
                                                                         (7.0%)                                     (4.0%)                (3.0%)
Adjusted operating income                                                  62.0                                       32.7                  29.3                     90%
                                                                         (6.6%)                                     (3.5%)                (3.1%)
Operating income                                                           58.0                                       28.2                  29.8                 105%
                                                                         (6.4%)                                     (3.1%)                (3.2%)
Income before income taxes                                                 56.0                                       25.6                  30.4                 119%
Net income attributable to                                               (3.7%)                                     (1.3%)                (2.4%)
owners of the parent                                                       32.3                                       10.3                  22.0                 212%
EBIT                                                                       58.8                                       28.7                  30.0
                                              1Q     2Q-4Q Total                                 FY2020
              Currency                                                                                                              change
                                             Actual Forecast Forecast                             Actual
Rate (YEN/US$)                                 109.5   105.0    106.0                                                 106.0                    0.0      For FX
Rate (YEN/EURO)                                132.0   125.0    126.9                                                 124.6                    2.3      sensitivity,
Rate (YEN/RMB)                                  17.0     16.0    16.2                                                  15.7                    0.5      please refer
                                                                                                                                                        to appendix 1.
Rate (YEN/AU$)                                  84.3     80.0    81.0                                                  76.0                    5.0
Cash dividend per share (yen) *1                to be determined                                                        20                        -

*1 “Cash dividend per share”: The Company will pay dividends linked to its consolidated business results twice, interim
   and year end, in the fiscal year and aim to achieve a consolidated dividend payout ratio of approx. 30% or more.
                                                                                             © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.    36
Business Results
Consolidated revenue forecast by geographic region

Consolidated revenue for FY2021 is expected to increase by 66.7 billion yen y-y,
due to an increase in other regions, although decreasing in China, India, and Africa.
                                                                                                            (billions of yen)

                             FY2021                     FY2020                                           change
                             Forecast                    Actual
                                                                                              amount                       %

Japan                       211.5         24%          203.3                  25%                      8.1                          4%
Asia                          68.9         8%            52.7                    6%                  16.2                     31%
India                         46.8         5%            50.0                    6%                  -3.3                      -7%
Oceania                     145.0         16%          139.9                  17%                      5.0                          4%
Europe                        99.0        11%            87.8                 11%                    11.2                     13%
N.America                   149.4         17%          107.2                  13%                    42.2                     39%
L.America                     14.2         2%            10.9                    1%                    3.4                    31%
Russia-CIS                    34.7         4%            22.7                    3%                  12.0                     53%
M.East                        20.5         2%            16.1                   2%                     4.5                    28%
Africa                        30.3         3%            33.6                   4%                   -3.3                   -10%
China                         59.6         7%            89.1                 11%                  -29.5                    -33%
Total                       880.0       100%           813.3               100%                      66.7                           8%
Overseas ratio               76%                         75%
                                                            © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.    37
Business Results
 Mining revenue forecast

   Revenue of mining in FY2021 is expected to increase by 12% to 138.0 billion yen y-y,
   the same as the previous forecast.

                                                                    %     shows sales ratio against total company sales
[billions of yen]                                                 [ % ] shows changed ratio from the same period of
                                                                        previous year

                                                  18%
                                          16%

                                  14%                                     16%
             15%          16%                              15%                        [ 12%] Machine
                    15%                                                                          Total
                                                                                      [ 6%]
                                                                                                                            16%
                                                                                                [ 23%]

                                                                                      [ 34%]

                                                                                                           15%
                                                                                     [ 6%]

                                                            © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   38
Business Results
  Value         chain*1        revenue forecast

    Revenue of parts and services in FY2021 is expected to increase by 7% to 185.0 billion yen y-y,
    the same as the previous forecast.
                                                                                                         %     shows sales ratio against total company sales
                                                                                                       [ % ] shows changed ratio from the same period of
[billions of yen]
                                                                                                             previous year

                                                  39%                                                      45%                                             (*2)
                                40%                                  41%
                                                                                       43%                             [ 12%]

                                                                                                                       [ 18%]                              46%
               35%                                                                                                                                                      [ 10%]
                                                                                                                       [ 18%]
                                                                                                                                                                        [ 16%]

                                                                                                                       [ 15%]                                           [ 18%]

                                                                                                                                  42%                                   [ 16%]

                                                                                                                       [ 9%]
                                                                                                                                             [ 20%]

                                                                                                                                             [ 24%]                     [ 4%]
                                                                                                                        [ 7%]                [ 18%]
                                                                                                                                             [ 9%]                         [ 2%]
                                                                                                                       [ 6%]                 [ 25%]
                                                                                                                                                                        [ △1%]
                                                                                                                                                  [ 26%]
                                                                                                                                             [ 28%]

      (*1) Value chain: Total of Parts & services, Solution business, Rental etc. other than new machine sales.
      (*2) Solution business: The business segment primarily intends to provide development, production, distribution of parts and service solutions for
           mining facilities and equipment after the sales made that are not included in the construction machinery business segment.

                                                                                                © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.           39
Business Results
Comparison of consolidated income forecast

 Adjusted operating income for FY2021 is expected to increase by 29.3 billion yen y-y due to
 an increase in sales volume and model mix and depreciation of the yen,
 although there is an increase in material costs and overheads costs.
                                          Sales Volume                     15.4                                                                                                                note : (                  ) shows previous forecast as of April 2021
                                          Model mix of value chain business14.3
                                          Other model mix                  15.2                                                                              Increase of expense linked to
[billions of yen]                                                                                                                                            production and sales           -8.8
                                                                                                                                                             Decrease of general overheads 2.6
      100                                                                            (-0.9)
                                                                                          (-0.2)
                                                                                                                                                             Increase of expense for sustained
                                                (52.6) 7.3 -14.6                                                                                             growth                        -14.1
        90
                                                50.8           (-20.3)
                                                                                      Selling price

                                                                                                      Material cost

        80                                                                                                            -20.3                                                                                                                                (0.9)
                                                  Sales volume, model mix & others

                                                                                                                       Overhead
                                                                                                                                   (-1.9) (62.0)                                                                                                           0.9
                                                                                                                                                               62.0                                                                                                                              (-0.4)(58.0)
        70
                                                                                                                                    6.2                                                                                  (29.3)
                                                                                                                                                                                                                                                                                                 -0.4 58.0

                                                                                                                                                                                                                                                            Expenses related structural reform
        60
               32.7                                                                                                                                                                                                       29.3
                                                                                                                                     Foreign exchange rate

                                                                                                                                                                 Adjusted operating income
                    Adjusted operating income

                                                                                                                                                                                                                          income
                                                                                                                                                                                                                          variance of adjusted operating

                                                                                                                                                                                                                                                                                                 expenses
                                                                                                                                                                                                                                                                                                 Other operating income and
        50
                                                                                                                                                                                                   28.2

                                                                                                                                                                                                                                                                                                                                Operating income
        40                                                                                                    US$            0.5

                                                                                                                                                                                                      Operating income
                                                                                                              EUR            1.3
        30                                                                                                    RMB            0.9
                                                                                                              AU$            1.2
        20

        10

         0
                    FY20                                                                                                                                        FY21                                 FY20                                                                                                                      FY21
                Actual                                                                                                                                         Forecast                             Actual                                                                                                                    Forecast
                                                Total variance excluding FX effect 23.1
                                                                                                                                                                                             © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.                                                                                 40
Business Results
Appendix 1: FX rate and FX sensitivity

 The forecast exchange rate for FY2021 was set within the expected fluctuation range for each
 currency.

FX rate and FX sensitivity                                                                                                [billions of yen]

                          FX rate                                       FX sensitivity (2Q-4Q)
                      FY21                                                                                      Adjusted
Currency                                     FY20
            1Q       2Q-4Q        Total                          Condition                              Revenue operating
                                             Actual
           Actual    Forecast    Forecast                                                                        income

US$          109.5      105.0       106.0      106.0 Impact by 1 yen depreciation                                   1.7                   1.3

EURO         132.0      125.0       126.9      124.6 Impact by 1 yen depreciation                                   0.5                   0.4

RMB           17.0        16.0        16.2      15.7 Impact by 0.1 yen depreciation                                 0.3                   0.1

AU$           84.3        80.0        81.0      76.0 Impact by 1 yen depreciation                                   1.6                   0.2

                                                                  © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.    41
Business Results
 Appendix 2: Detail of mining revenue

                                                                                                                           [billions of yen]

                                      FY20                      FY21
                                      Actual                   Forecast                                  Change
                               1Q     2-4Q      Year     1Q      2-4Q           Year               1Q     2-4Q                     Year
America           Excavator     3.2       7.3     10.6     1.9      4.8            6.8              -1.3    -2.5                     -3.8
                  Dump Truck    0.3       1.8      2.1     0.7      1.8            2.5               0.4     0.0                      0.4
                     Total      3.5       9.1     12.7     2.6      6.6            9.2              -0.9    -2.5                     -3.4
Europe, Africa    Excavator     3.2      12.1     15.3     6.2     14.7             20.8               2.9              2.6                5.5
and Middle East   Dump Truck    2.0      10.3     12.2     3.7     10.2             13.9               1.8             -0.1                1.7
                     Total      5.2      22.4     27.6     9.9     24.8             34.7               4.7              2.5                7.2
Asia & Oceania    Excavator    11.9      37.7     49.6    16.2     48.4             64.6               4.3            10.7                15.0
                  Dump Truck    7.7      23.1     30.8     5.1     21.4             26.5              -2.6            -1.7                -4.3
                     Total     19.7      60.8     80.5    21.4     69.8             91.1               1.7             8.9                10.7
China             Excavator     0.2       0.5      0.7     0.2       0.4              0.6             -0.0             -0.1               -0.1
                  Dump Truck    0.0       0.1      0.1     0.0       0.1              0.1              0.0              0.1                0.1
                     Total      0.2       0.6      0.8     0.2       0.5              0.7             -0.0             -0.0               -0.1
Japan             Excavator     0.3       1.3      1.6     0.1       1.5              1.6             -0.1               0.2               0.0
                  Dump Truck    0.0       0.4      0.4     0.0       0.6              0.6             -0.0               0.2               0.2
                     Total      0.3       1.7      2.0     0.1       2.0              2.1             -0.2               0.3               0.2
Total             Excavator    18.9      59.0     77.9    24.6    69.8             94.4                5.8            10.8                16.5
                  Dump Truck   10.0      35.6     45.6     9.5    34.0             43.6               -0.5            -1.6                -2.0
                     Total     28.9      94.6    123.5    34.1   103.8            138.0                5.3             9.2                14.5

                                                                  © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.    42
Business Results
Appendix 3: Segment information

The amortizations of PPA are included in the adjusted operating income of the solution
business. The amounts of 0.3 billion yen are included in the first quarter of FY2021, and in the
1.1 billion yen in the forecast for FY2021.

                                                                                                                                                 [billions of yen]
                                                       Reportable segment
               FY2021
                                                Construction                                       Adjustments
                 1Q                                                          Solution                                                      Total
                                                 Machinery                                              *1
               Actual                                                        Business
                                                  Business

              Revenue                                         206.5                     22.5                      -0.9                                   228.1

   Adjusted operating income                      4.9%         10.1        7.5%          1.7                     -                    5.2%                 11.8

                                                                                                                                                 [billions of yen]
                                                       Reportable segment
              FY2021                            Construction                                       Adjustments
                                                                             Solution                                                      Total
              Forecast                           Machinery                                              *1
                                                                             Business
                                                  Business

              Revenue                                         789.4                     90.6                         0.0                                 880.0

   Adjusted operating income                      6.9%         54.3        8.4%          7.7                     -                    7.0%                 62.0

*1: Adjustments represent eliminations of intersegment transactions and amounts of companies that do not belong to any operation segment.

                                                                                        © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   43
Company Outline and Topics

Corporate Vision
FY2021-1Q

1. Management Plan
2. Business Results
3. Company Outline and Topics

                                 © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   44
Company Outline and Topics
Company Outline

・Company Name          Hitachi Construction Machinery Co., Ltd.
                       Stock Exchange Listings:Tokyo (#6305)
・Major Operations      Manufacturing , sales and service of construction equipment,
                       transportation equipment, and other machines and devices.

・Established           1 October, 1970

・Capital               81.6 billion Yen (Hitachi, Ltd:50.81%)

・President             Kotaro Hirano

・Subsidiaries          Japan: 7 companies, Overseas: 74 companies
 Affiliates            Japan: 3 companies, Overseas: 20 companies

・Number of Employees   Consolidated :24,873     Non-consolidated :5,455

                                                                                               (March 31, 2021)

                                                        © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   45
Company Outline and Topics
Our Products and Revenue

      Construction

                                                                                                                            Road Construction
Hydraulic Excavator        Mini excavator   Wheel-drive Type      Double-Front Work                  Wheel Loader              equipment
(Hybrid / ICT hydraulic excavator)          Hydraulic Excavator   Machine

 Value Chain                                                             Mining

 43%                         Others
                       Rental 5%
                        7%
            Solution
            Business
              10%                                                     Dump Truck                          Ultra-large Hydraulic Excavator
                          FY2020 Revenue
                                                 Construction         Value Chain
                                 813.3
        Construction
          Parts &                                New Machine           business
                                                     52%
          Services        (Billions of yen )
            11%
                 Mining                                                                                 H-E Parts                  Bradken
            Parts & Services
                  10%
                         Mining
                      New Machine                                 Mine management system                            ConSite
                           5%
                                                                           © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   46
Company Outline and Topics
Sales Trend

( Billions of yen )                                                                                                                          (%)

  1,200
12,000                                                                           ‘08 the collapse   ’19~ COVID-19                           90
                                                                                 of Lehman Brothers
                  Overseas revenue
                  海外売上高                                                                                                                     80
  1,000
10,000
                  Domestic revenue
                  国内売上高                                                                                                                     70

    800
 8,000            Overseas revenue ratio
                  海外事業比率                                                                                                                    60
                                                        ‘97 Asian
                                                        Financial Crisis
                                                                                                                                            50
    600                                   ‘91 the bursting of
 6,000                                    the Japan’s bubble
                                          economy                                                                                           40

    400
 4,000                                                                                                                                      30

                             ‘85 Plaza Accord                                                                                               20
    200
 2,000
                                                                                                                                            10

      00                                                                                                                                    0
           '70        '75   '80     '85         '90       '95       '00             '05            '10             '15              ‘20
                                                                           © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   47
Company Outline and Topics
Sales Trend-Decentralization in sales and profit

    ■Sales ratio in China decreased, regional decentralization in profit
      (FY10)       (FY16)                                                               (FY21)Estimate
    China                   : 26%      → 10%                                                        →           7%
    Asia & Oceania(Oceania) : 26%(10%) → 28%(13%)                                                   →           30%(16%)
    The Americas          :   8%       →   11%                                                      →           19%
    (billions of yen)                     Go Together
                                                       2013
                                                                         GROW TOGETHER
                                                                             2016
                                                                                                 CONNECT TOGETHER
                                                                                                       2019
                                                                                                                                   Realizing Tomorrow’s
                                                                                                                                    Opportunities 2022
                     Chi na                                       As i a & Oceani a                         The Ameri cas
     1,200           Europe,Afri ca and M.Eas t                   Japan                                     Ra�o of Chi na                         35%
                     Ra�o of As i a & Oceani a                    Ra�o of The Ameri cas

     1,000                                                                                                                                         30%

                                                                                                                                                   25%
      800
                                                                                                                                                   20%
      600
                                                                                                                                                   15%
      400
                                                                                                                                                   10%

      200                                                                                                                                          5%

        0                                                                                                                                          0%
             FY07   FY08   FY09    FY10    FY11       FY12       FY13   FY14    FY15      FY16   FY17      FY18      FY19     FY20     FY21(E)

             (billions of yen)

      US$    114     101     92      85       79        82        100    111     120       109     111       111       109       105     105
      Euro   161     156    129     112      108       108        135    138     132       119     130       128       121       125     125
                                                                                             © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   48
Company Outline and Topics
Global Network(Major sites)

              Russia
   Europe
                                                                                        Americas
                     China
       Middle East              Japan

                 India
                         Asia
  Africa                                Oceania

                                        Sales & Service                       Manufacturing
                                                                               *Including parts remanufacturing

                                                © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   49
Company Outline and Topics
Growth Potential of HCM

   Concentrating on the continuous structural reform
   to secure sales and profit
    +:Consolidation of joint venture business in India, Acquisition of Wenco, Bradken,
     and H-E Parts, etc.
    -:Withdrawal from engine manufacturing, temporal withdrawal of small-sized
     dump truck, non-consolidation of crane business, etc.

   Increase in sales and profit of parts & service
   utilizing ConSite®
    Increase in timely proposals to customers based on high accuracy machinery
     information
    Effect of customer-based service via direct sales and service

   Open innovation and Efficient R&D through synergy with
   Hitachi group
    Development of AC dump truck and AHS in short-time because of accumulated
     technology from performance in other sectors
    Expectation for further improvement via accumulated machinery information
     with AI analysis on Global e-service®
    Accelerate promotion of Collaborative Construction Equipment development
     and technological development for reducing CO2 emissions
                                               © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   50
Company Outline and Topics
Growth Potential of HCM-1
        Concentrating on the continuous structural reform
        to secure sales/profit    Termination of Joint Venture Relationship
                                                                                                        with Deere
                                                            Signed a MoU with ABB
                                             Investment in Australian Startup Baraja
                              Establishment of Synergy Hire (Rental in UK)
Acquisition of WENCO                Investment in ACME(Rental in US)
                                         Acquisition of Bradken
          Consolidation of
                                   Hitachi Brand Wheel loaders
          joint venture
                                                  in N. America
          business in India
                                  Acquisition of H-E Parts

1974 2009 2010             2012                   2016 2017 2018 2019 2020 2021

  Withdrawal from engine            Temporal withdrawal of
  manufacturing                      small-sized dump truck
                     Discontinuation of             Non-consolidation of
                      forklift business                 crane business

                                                 © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   51
Company Outline and Topics
Acquisition of Two Solution Business Companies

                Aiming to deepen the value chain of the mining business
                            Bradken                                                                         H-E Parts
 1922: Company established                                                2006: Company established
 March 2017: Restructured as subsidiary of                                December 2016: Restructured as subsidiary of
  HCM                                                                       HCM
 Expanded to Australia, USA, Africa, Europe,                              Expanded to Australia, USA, Chile, Canada, and
  Asia, China, and other areas                                              other areas
 Main strength: Technical capabilities in                                 Main strength: Comprehensive after-market
  molding and casting                                                       solutions

  GET* , etc.         Liners for    Castings for fixed     Specialty      Comprehensive         Services & parts for    Comprehensive, high-        Comprehensive
                    crushers and      plant mining       castings, etc.    solutions for               crushing           horsepower diesel       undercarriage parts
                      mills, etc.    equipment, etc.                      mobile mining          equipment as well              engine           and GET for mobile
                                                                            equipment           as on-site and off-        remanufacturing           construction
                                                                                                   site services &             solutions              equipment
                                                                                                        repairs         (including rebuilding)

*Ground Engaging Tools                                                                     © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   52
Company Outline and Topics
Accelerating our open innovation in the mining business

Signed a MoU with ABB
to collaborate to target net-zero
emissions from mining machinery
                  Signed: March 2021
• Applying ABB’s electrification, automation
  and digital solutions to mining machinery
• Providing solutions that streamline and
  optimize overall mining operations
                                                 Rigid dump truck on trolley line

Investment in Australian Startup
Baraja to accelerate development
for autonomous operation
                  Invested: March 2021
• Accelerating the development of LiDAR               Images captured by LiDAR
  products with mine site specifications and
  strengthening local support.
• Applying the improvement of AHS and          .* LiDAR is an abbreviation for Light Detection And
                                               Ranging. This technology detects the shape of an object
  autonomous operation of ultra-large          and the distance to the object by irradiating the object
  hydraulic excavators.                        with a laser beam and capturing the reflected light with a
                                               sensor.
                                                        © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   53
Company Outline and Topics
Beginning Joint Development of a Full Battery Rigid Dump Truck with ABB

Toward realization of "Net Zero Emissions Mining,”
aiming to start experiments at a customer's mine by mid-2024
Limit the volume of batteries by a trolley charging system
• Control initial and lifecycle costs
• Reduce vehicle weight to maximize payload capacity.
• No need to stop for recharging; realize a high operating rate.

  Rigid dump truck model
        with trolley

                                                       © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   54
Company Outline and Topics
Growth Potential of HCM-2

            Enhancement in proposals and increase in sales and profit of parts & service
            utilizing Big Data Analysis

              Global e-Service®
                                                                                                                        Information
                                                               ®                    Sign
                                                                                                                   of machines and sensors
                                                                                 diagnostic                            ConSite®OIL※1
                                                                           Periodical report         Customer                                 Number of units
                                                                                                                                               in operation
                                                                           Urgent report
                                                                                                                                              Approx.330,000
                        Accumulated know-how
   Big Data             • Service know-how
   Analysis             • Failure diagnostics
                        • Technological knowledge
                                                                                    ConSite®
                                                                                    Pocket※2
                                                                Inspection/                      Enhancement
                             Maintenance/
                                                                maintenance                       in proposals
Recommendation of               Service                           Manual
parts that often need        Information
to be replaced at the                                                                                                      ConSite®               ConSite®
      same time
                                                                                                                            Shot※3                 Health
                                                                                                                                                  Check※4
※1:OIL sensing service for hydraulic oil or engine oil                                                                      Sales dealers
  (when sensors attached)                                                                                             / service representatives
※2:App for customers and sales dealers to receive reports
※3:Tools for service reps to inspect & propose for sites
※4:App for automated health check of equipment due to engine
                                                                                                           Order
  operation sound and measurement of hydraulic pump pressure                                               availability;                               HCM’s
※5:Order system for HCM’s genuine parts over the Internet at any time
                                                                                  ConSite®Parts            anytime,                                     Parts
   and from any location. It enables to check stocks, price, delivery time and                             anywhere                                   Warehouse
    recommended parts that often need to be replaced at the same time.             Web Shop
※:Areas for direct sales/service; Japan, Oceania/Asia, S.Africa,
  Netherlands, UK and USA(WL)
                                                                                       © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   55
Company Outline and Topics
Service Solution - ConSite

                                  Information infrastructure linking customers all over the
                                   world 24 hours a day, 365 days a year
                                  Provide high quality maintenance & repair services earlier
                                   than before

                                                                      Fully automated system
                                                                    for remote fault prediction
                                                           KPI: Remote prognostic detection rate* by sensing
                         113 countries & regions
                      and 33 languages are covered.           Failure prognostic detection rate

  ConSite adoption rate                                                    FY2023
                                                                         Target 90%
                                                      18

 Number of contracts:                                 16                                                                75%

   158,000 units                                      14                                                       71%

※As of the end of March 2021                          12                                              58%
                                                                                             37%
                                                      10
                                                                                    20%
                                                      8
                         FY2022 Target                6
                                                                                   FY15 FY17 FY18 FY19 FY20

                         adoption rate                4    *prognostic detection rate
                             90%                      2    Percentage of all failure patterns occurring in major components of
                                                           hydraulic excavators (excluding accessory failures) that can be
                                                      0    notified and covered in ConSite ® Alarms Report
    2014                                 2020                  © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   56
Company Outline and Topics
Topic: Digital Solutions to Resolve Problems at Mine Sites

Developed “ConSite® Mine”remotely monitoring mining
machinery on 24/7 basis, with Wenco. Releases in 2021.

• Visualize prediction the occurrence of cracks in the boom
  or arm by utilizing IoT, AI and applied analysis technologies
• Analyzing operator’s operational patterns and fuel consumption
• Improving productivity and safety, reducing life-cycle costs

                            Arm        Boom                ®

                  Analyzing loads
      to ultra-large excavator boom or arm                         Dashboard (example)

                                                           © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   57
Company Outline and Topics
Growth Potential of HCM-3

    Efficient R&D through synergy with Hitachi group
   Hitachi Group Technology          Development to HCM’s
                                      Product and Service
          Transportation

    Automobile        Energy

      Big data         AI

                                             Solution Linkage®
                                               ConSite®, AHS,
                                             Wenco, ICT equipment

                                       Improvement in energy
                                      productivity at factory※1
                               ※1:Utilizing Hitachi’s technology Emilia®; Integrated management of
                               energy data and facility
                                  © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   58
Company Outline and Topics
System Platform for Autonomous Construction Machinery

Development of a System Platform “ZCORE® ”
for Autonomous Construction Equipment
• Enabled the machinery to recognize, judge and execute, which operators
  conventionally do
• Easy addition and customization of functions, adapting various customer needs
  more quickly
• Applied to all kinds of our construction machinery, regardless of product type or size

                                                          © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   61
Verification Tests to Start Directed      Company Outline and Topics

at the Development of Autonomous Ultra-Large Hydraulic Excavators

• Utilizing the knowledge from many years of research and development in the
  remotely control technology to cater to the needs of customers
• Effective use of customer-owned equipment to retrofit onto the EX-7 series

                                           Ultra-large hydraulic excavator, EX3600-7(right)

 Current status and future schedule
 Until 2023: Development of remote operation systems including working assistance systems
 Until 2026: Combine remote control systems with partial operation automation
                                                            (autonomous drilling and loading functions)
 Until 2030: Added autonomous operation function
                                                                    © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   62
Company Outline and Topics
  Strengthening ICT Construction Solutions
 Wide-ranging support in response to customer issues related to ICT construction
          Want to use more drones                                                                    When will the dump come
          Want to know the volume easily                                                             Can’t use the Internet here..

                                      ?                                                                                    ????

                                                        Solution Linkage® Assist
                                               Assist operation with 2D/3D machine control

                                                            Construction      Construction
                                                              record           Chart Data

     Solution Linkage® Point Cloud                                                               Solution Linkage® Mobile
Prepare 3D point group data easily from drone imagery                                        Visualization of sites with smartphones and tablets
                                                             Solution      Linkage®
                       m3                                          Cloud

      Solution Linkage® Survey                                                                     Solution Linkage® Wi-Fi
                                                        Share data with remote location,       Improving the communication environment
      Easy measurement with smartphones,
                                                                                                   and introducing an IoT to the site
    also compatible with volume calculations                 such as headquarters
                                                                                    © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   63
Company Outline and Topics
Proactively promoting battery-powered mini excavators in response to
      growing demand for electrification

Electric Mini Excavators now on sale since 2020 by collaboration
between Japan & Europe
• Demand for electric construction machinery is growing, as the shift
  to electric vehicles becomes clear.
• 8-ton class has received orders for about 25 units in Europe for 2020, target 50 units for 2021.
• 5-ton class is scheduled to be released for Japan and Europe during FY2021.
• Equipped with lithium-ion batteries and powered by both battery and commercial power.

   European
                                                                                            HCM*
   Application
                                                                                            HCM Tierra
   Center
                                                         Battery-powered mini excavator
 Development based on existing models                    with a short rear end swing design
 to rapidly respond to European market                   developed with an emphasis on work
 needs                                                   in narrow spaces
                                                                                             * Hitachi Construction Machinery

2-ton class prototype and 8-ton class on sale                           5-ton class prototype
                                                           © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   64
Company Outline and Topics
Strengthening the system to meet new market needs in China

Expanding the product line-up of excavator for civil construction use
• Mainly targeting self-employed operators, who are the volume zone of demand
• Realizing the best suited specifications and structure for urban civil construction
  and the high cost-effectiveness
• Utilize the operating data of the models for new product development and sales
  strategy in the future.

           6-ton class                 12-ton class                             20-ton class

Strengthening our group’s sales and service systems
• Newly opened three regional offices, Chengdu, Beijing, Shanghai
  to support dealers in their nearby regions
• Holding seminars on systematic sales methods and sales process
   management.

Collaborate on rental and used equipment businesses,
deepen value chain business
• Selling our rental equipment as high-quality used equipment                                   National Dealer
  "PREMIUM USED“.                                                                                Conference
                                                         © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   65
Company Outline and Topics
Strengthening marketing and sales in Southeast Asia

User testing of the excavators for civil construction use is underway
from April 2021.
• Considering the best-suited specifications
  and structure for urban civil construction
• Reflecting the voices of local customers
  in product development
                                                             User testing

Accelerating the expansion of used equipment
businesses, and deepening value chain business
• Procuring local used equipment and expanding
                                                                               Vietnam
  them as our guaranteed and refurbished ones          Thailand
                                                                                                          Philippines
• Creating high-quality used equipment
  from our rental machines                                         ●
                                                                    Malaysia

• ConSite® provides manufacturer-quality maintenance
  and service after the sale
                                                                           ●
                                                                                         Indonesia

                                                 【 Area of Coverage 】
                                                      Guaranteed and refurbished used equipment
                                                      (PREMIUM USED+REFURBISHED USED)
                                                  ●   Rental business(PREMIUM RENTAL)
   Refurbished used        Guaranteed used
                                                      © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   66
Company Outline and Topics
 Used Equipment

 Expansion of sales of used equipment from Japan
 (auction business)
 □Hosting auctions of 3500 units per year
 □Sales of good-conditioned used equipment, which made
  possible through the distinctive service as a manufacturer

                                                                                     Auction venue of HCM Japan

                                                                          Japan                                           China

 Expansion of
 Certified / Refurbished Used equipment’s sales
□Sales of well-maintained, high-value added used equipment in Japan, China, Asia and Europe, etc.
                                                           © Hitachi Construction Machinery Co., Ltd. 2021. All rights reserved.   67
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