July 29, 2014

© Hitachi Construction Machinery Co., Ltd. 2014 All rights reserved.

Senior Vice President and Representative Executive Officer

Mitsuhiro Tabei

Regional Market Environments and Projections

Business Result for the First Quarter ended June 30, 2014

Hitachi Construction Machinery Co., Ltd.

2

31 33 20

10 14 23 28

40 29 30

42 52

26

15

23

27 25

27

32 35

30 24

17

10

13

19 24

24 25

25

29

47

44

73

111 70 42

50 50 40

21

29

23 29

40

48

44

36 37

32

25

36

32 15

29

38

39

34 37

31 179

221

161

151

230 225

202

211 210

193

0

25

50

75

100

125

150

175

200

225

250

'06 '07 '08 '09 '10 '11 '12 '13 '14 '14

（K Units）

Global Demand Trend for Hydraulic Excavators

Japan

Western Europe

North America

China

Asia Oceania

Others

Total

＊Estimates by HCM (Distributing, copying, or forwarding prohibited)

＊Excluding Chinese manufacturer

＊Incl. India

Year-on-Year Change

Emerging Countries 2014：54％ (Y-0-Y Change:-3%) ※Emerging Countries: China, Asia/Oceania, and others

Previous

Forecast

Latest

Forecast

'13 '14 '14Previous Forecasｔ Latest Forecast

+4% -1% -9%Russia, E

Europe, CIS-17% +4% -11%

Africa -5% +3% -5%Middle East -19% -3% +1%

Latin America -17% +14% -12%

-14% +2% -9%India -26% -1% -11%

Indonesia -20% +1% -21%Others -13% +8% -8%

-18% +4% -11%

+19% +1% -20%

+2% +4% +4%

+9% +14% +30%

+43% -28% -25%

China

N America

W Europe

Japan

Total

Others

Asia & Oceania

3

-150%

-100%

-50%

0%

50%

100%

150%

0

5

10

15

20

FY09/1Q

2Q

3Q

4Q

FY10/1Q

2Q

3Q

4Q

FY11/1Q

2Q

3Q

4Q

FY12/1Q

2Q

3Q

4Q

FY13/1Q

2Q

3Q

4Q

FY14/1Q

2Q

-40%

-20%

0%

20%

40%

FY09/1Q

2Q

3Q

4Q

FY10/1Q

2Q

3Q

4Q

FY11/1Q

2Q

3Q

4Q

FY12/1Q

2Q

3Q

4Q

FY13/1Q

2Q

3Q

4Q

FY14/1Q

<Japan>

New housing starts (number of houses)

Capex （Orders for machinery, excluding foreign demands)

Public spending （Public work orders）

＊Source: MLIT, Cabinet Office, and Construction Surety Company

＊Estimates by HCM

(K units)

＊Estimates by HCM

Market Environment: Housing/Public Spending and Capex (y-o-y)

Demand Trend for Hydraulic Excavators

Demand Trend for Wheel Loaders

-150%

-100%

-50%

0%

50%

100%

150%

0

5

10

15

20

FY09/1Q

2Q

3Q

4Q

FY10/1Q

2Q

3Q

4Q

FY11/1Q

2Q

3Q

4Q

FY12/1Q

2Q

3Q

4Q

FY13/1Q

2Q

3Q

4Q

FY14/1Q

2Q

-150%

-100%

-50%

0%

50%

100%

150%

0

5

10

15

20

FY09/1Q

2Q

3Q

4Q

FY10/1Q

2Q

3Q

4Q

FY11/1Q

2Q

3Q

4Q

FY12/1Q

2Q

3Q

4Q

FY13/1Q

2Q

3Q

4Q

FY14/1Q

2Q

＊Estimates by HCM

Demand Trend for Mini Excavators

(K units)

(K units)

◇Demands for public works, etc. remain robust while only housing starts decline.

◇Investment-promoting taxation effects curbed the decrease in demands for hydraulic

excavators in 1Q at 15%.

4 ≪Topics≫

Rikuzentakata City in Iwate Prefecture

Upland relocation construction site

The ultra-large hydraulic excavator was utilized at an *upland relocation site for the first time

* Project to build the upland by raising the existing town’s ground level, utilizing heavy machineries then relocating

the town to the upland.

The ultra-large hydraulic excavator, EX1900, began operation in June as our

first rental machinery.

Scheduled area for land

readjustment projects Disaster public housing:

Shimowano district

The site where EX1900 is in

operation

Imaizumi

construction area

Takata

construction area

5

-100%

-50%

0%

50%

100%

0

5

10

15

20

FY09/1Q

2Q

3Q

4Q

FY10/1Q

2Q

3Q

4Q

FY11/1Q

2Q

3Q

4Q

FY12/1Q

2Q

3Q

4Q

FY13/1Q

2Q

3Q

4Q

FY14/1Q

2Q

-100%

-50%

0%

50%

100%

0

5

10

15

20

FY09/1Q

2Q

3Q

4Q

FY10/1Q

2Q

3Q

4Q

FY11/1Q

2Q

3Q

4Q

FY12/1Q

2Q

3Q

4Q

FY13/1Q

2Q

3Q

4Q

FY14/1Q

2Q

<Europe>

＊Source: IMF, etc ＊Estimates by HCM

＊Estimates by HCM ＊Estimates by HCM

(K units)

France

EUR zone

UK

Germany

France

UK

Germany

Italy

Others

France

UK

Germany

Italy

Others

(K units)

France

UK

Germany

Italy

Others

Demand Trend for Hydraulic Excavators Demand Trend for Wheel Loaders

Demand Trend for Mini Excavators

-100%

-50%

0%

50%

100%

0

5

10

15

20

FY09/1Q

2Q

3Q

4Q

FY10/1Q

2Q

3Q

4Q

FY11/1Q

2Q

3Q

4Q

FY12/1Q

2Q

3Q

4Q

FY13/1Q

2Q

3Q

4Q

FY14/1Q

2Q

(K units)

◇ In addition to the robust UK economy, Germany is also on a recovery trend,

and the overall European economy has rallied.

◇ Demands increased in the UK, Germany, and France, while Southern European

countries are also on recovery trends.

-1%

0%

1%

2%

CY09/1Q

2Q

3Q

4Q

CY10/1Q

2Q

3Q

4Q

CY11/1Q

2Q

3Q

4Q

CY12/1Q

2Q

3Q

4Q

CY13/1Q

2Q

3Q

4Q

CY14/1Q

GDP Growth Rate in Major Countries (y-o-y)

6 ≪Topics≫ Release of New Model Machinery for the European Market

Completed development of new wheel loader, ZW-5B series, in Europe

Introduced hybrid hydraulic excavators in European market

ZW330-5B

All 9 models were released by July 2014

Model: ZW140 (2.0 m3) ~ ZW550 (6.1 m3)

※ZW310 ~ ZW550 were jointly developed with KCM Corporation

Responsive to emissions regulations (EURO StageⅢB)

Enhanced fuel-efficiency by full model change

• In operation at the

quarry in Germany

• Its fuel-efficiency has

been well received ZW330-5B exhibited at HILLHEAD

of UK in June 2014

ZH210LC-5B in operation

Sales launched in April 2014

The first European market model was

delivered to France

Responsive to emissions regulations

(EURO StageⅢB)

7

0

5

10

15

20

FY09/1Q

2Q

3Q

4Q

FY10/1Q

2Q

3Q

4Q

FY11/1Q

2Q

3Q

4Q

FY12/1Q

2Q

3Q

4Q

FY13/1Q

2Q

3Q

4Q

FY14/1Q

2Q

-100%

-50%

0%

50%

100%

<North America>

-10%

-5%

0%

5%

10%

0

500

1000

1500

2000

CY09/1Q

2Q

3Q

4Q

CY10/1Q

2Q

3Q

4Q

CY11/1Q

2Q

3Q

4Q

CY12/1Q

2Q

3Q

4Q

CY13 1

Q

2Q

3Q

4Q

CY14/1Q

2Q

Housing starts (Left axis)

GDP （y-o-y/Right axis)

＊Bureau of Economic Census, US Census Bureau

（Seasonally adjusted）

＊Bureau of Economic Census, US Census Bureau

(K units)

＊Estimates by HCM

＊Estimates by HCM

Demand Trend for Mini Excavators

Demand Trend for Hydraulic Excavators

Construction Spending in US (y-o-y)

GDP Growth Rate, Housing Starts in US

50%

75%

100%

125%

150%

CY09/1Q

2Q

3Q

4Q

CY10/1Q

2Q

3Q

4Q

CY11/1Q

2Q

3Q

4Q

CY12/1Q

2Q

3Q

4Q

CY13/1Q

2Q

3Q

4Q

CY14/1Q

2Q

Residential Non-residential State & Local

0

5

10

15

20

FY09/1Q

2Q

3Q

4Q

FY10/1Q

2Q

3Q

4Q

FY11/1Q

2Q

3Q

4Q

FY12/1Q

2Q

3Q

4Q

FY13/1Q

2Q

3Q

4Q

FY14/1Q

2Q

-100%

-50%

0%

50%

100%

(K units)

(K units)

◇ Housing starts and construction investment maintained high level.

Unemployment rate improved to 6.1% (at the end of June)

◇ Construction machinery demands remain high (mainly for housing and energy-related projects).

8

0

10

20

30

40

50

60

70

FY09/1Q

2Q

3Q

4Q

FY10/1Q

2Q

3Q

4Q

FY11/1Q

2Q

3Q

4Q

FY12/1Q

2Q

3Q

4Q

FY13/1Q

2Q

3Q

4Q

FY14/1Q

2Q

-150%

-100%

-50%

0%

50%

100%

150%

<China>

Domestic

Foreign

0%

10%

20%

30%

40%

CY09/1Q

2Q

3Q

4Q

CY10/1Q

2Q

3Q

4Q

CY11/1Q

2Q

3Q

4Q

CY12/1Q

2Q

3Q

4Q

CY13/1Q

2Q

3Q

4Q

CY14/1Q

2Q

0

5

10

15

20

North China -5%/23%/-12%/-44%

North West 27%/30%/-7%/-25%

South West 46%/59%/16%/-12%

North East 20%/24%/40%/-31%

South Middle China 25%/45%/7%/-23%

East China 33%/56%/8%/-26%

Total China 27%/48%/7%/-25%

(y-o-y)

Fixed Assets Investment (y-o-y) (Left axis)

ＧＤＰ (Right axis)

＊National Bureau of Statistics of China

GDP and Fixed Asset Investment Demand Trend for Hydraulic Excavators

Quarterly Demand for Hydraulic Excavators by Region (y-o-y)

（K units) （％） ＊Estimates by HCM

Y-o-y comparison data is limited to foreign manufactures only

FY13 2Q/3Q/4Q /FY14 1Q

Demand Composition by Class for Mini Excavators and Hydraulic Excavators

(7.5%) (17.2%)

0%

20%

40%

60%

80%

100%

FY11

1H 2H

FY12

1H 2H

FY13

1Q 2Q 3Q 4Q

FY14

1Q

20t and

below

20t

over

～6t

20t

10～15t

21～29t

30～39t

40t～

6～10t

＊Estimates by HCM

Foreign manufactures only

＊Foreign manufactures only

＊Estimates by HCM

＊当社推定 ◇ Growth of fixed asset investment decreased from April to June 2014.

◇ Demands fell below the previous year in all regions from April to June 2014:

decreased 25% year-on-year (foreign manufactures only).

9

0

5

10

15

4月 5月 6月 7月 8月 9月 10月11月12月1月 2月 3月 4月 5月 6月 7月 8月 9月 10月11月12月 1月 2月 3月 4月 5月 6月-80%

-60%

-40%

-20%

0%

20%

40%

60%

《Topics》 Chinese Market

Monthly Demand Trend of Hydraulic Excavators

(K units) Monthly Demand Trend for Hydraulic Excavators

FY2012 FY2013

（Foreign Manufactures Only)

（Compared to the same month in the previous year）

(Foreign Manufactures only）

＊Estimates by HCM

11% 27% 48% 7%

y-o-y

-25%

0

2

4

6

8

10

4月 5月 6月 7月 8月 9月 10月 11月 12月 1月 2月 3月

＊Estimates by HCM 【Chinese New Year】

Feb 10, 2013

Jan 31, 2014

Feb 19, 2015

*Apr-Jun Actual

(K units)

FY12 Actual FY13 Actual

Forecast FY14

Apr. May. Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar.

FY2014

Apr. May. Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May. Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May. Jun.

10

0

2

4

6

8

10

FY09/1Q

2Q

3Q

4Q

FY10/1Q

2Q

3Q

4Q

FY11/1Q

2Q

3Q

4Q

FY12/1Q

2Q

3Q

4Q

FY13/1Q

2Q

3Q

4Q

FY14/1Q

2Q

-150%

-100%

-50%

0%

50%

100%

150%

0

1

2

3

4

5

FY09/1Q

2Q

3Q

4Q

FY10/1Q

2Q

3Q

4Q

FY11/1Q

2Q

3Q

4Q

FY12/1Q

2Q

3Q

4Q

FY13/1Q

2Q

3Q

4Q

FY14/1Q

2Q

-150%

-100%

-50%

0%

50%

100%

150%

-10

-5

0

5

10

15

20

CY09/1Q

2Q

3Q

4Q

CY10/1Q

2Q

3Q

4Q

CY11/1Q

2Q

3Q

4Q

CY12/1Q

2Q

3Q

4Q

CY13/1Q

2Q

3Q

4Q

CY14/1Q

<Asia/Oceania and India>

＊Source: IMF, etc

Thailand

Malaysia

Singapore

Australia

Indonesia

ＮＺ

Others

＊Estimates by HCM

(％)

(K units)

＊Estimates by HCM (K units)

Demand Trend for Hydraulic Excavators in Asia & Oceania

Demand Trend for Hydraulic Excavators in India

GDP Growth Rate in Major Countries (y-o-y)

Malaysia

Indonesia India

Singapore

Thailand

(１Q GDP 4.6%)

◇ Demand downturn in resource-rich countries (Australia, Indonesia) and sluggish demands

in Thailand due to political uncertainty.

◇ Despite a sense of expectancy to Indian and Indonesian new political administration,

more time is required for demands to recover.

11

0

100

200

300

400

500

0

500

1000

'09 '10 '11 '12 '13 '14 '15

(US$/t) (US$/t) Price of Thermal coal, Palm Oil future and Lumber

＊Estimated by HCM (K Units )

《Supplementary Information》 Indonesian Market

Coal

(Right axis)

Lumber

(Right axis)

Palm Oil

(Left Axis)

＊ Created by HCM , the source from World Bank HP

Demand for Hydraulic Excavators （y-o-y）

0%

50%

100%

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

Demand Composition for Hydraulic Excavators by Classes

＊Estimated by HCM

～15t

30～39t

16～29t

40～74t

75t～

ＦＹ１１ ＦＹ１２ ＦＹ１３

0

1

2

3

4

FY09/1Q

2Q

3Q

4Q

FY10/1Q

2Q

3Q

4Q

FY11/1Q

2Q

3Q

4Q

FY12/1Q

2Q

3Q

4Q

FY13/1Q

2Q

3Q

4Q

FY14/1Q

-100%

-50%

0%

50%

100%

ＦＹ１４

Coal/ Palm oil/Lumber price are weak

12 <Russia and the Middle East>

0.00

5.00

10.00

15.00

20.00

50.00

75.00

100.00

125.00

150.00

09年 10年 11年 12年 13年 14年

*Created by HCM , the source from IMF HP

ＵＡＥ

Saudi Arabia

Turkey

Others

0

1

2

3

4

5

FY09/1Q

2Q

3Q

4Q

FY10/1Q

2Q

3Q

4Q

FY11/1Q

2Q

3Q

4Q

FY12/1Q

2Q

3Q

4Q

FY13/1Q

2Q

3Q

4Q

FY14/1Q

2Q

-100%

-50%

0%

50%

100%(K units)

-100%

-50%

0%

50%

100%

0

1

2

3

4

5

FY09/1Q

2Q

3Q

4Q

FY10/1Q

2Q

3Q

4Q

FY11/1Q

2Q

3Q

4Q

FY12/1Q

2Q

3Q

4Q

FY13/1Q

2Q

3Q

4Q

FY14/1Q

2Q

(US$)

Demand Trend for Hydraulic Excavators in Russia

Demand Trend for Hydraulic Excavators in Middle East Price Trend of Crude Oil and Natural Gas

*Estimates by HCM

*Ex-Works base

*Incl. Local manufacturing

(US$)

Crude Oil

（Left axis）

Natural Gas

(Right axis)

<ＩＭＦ forecast as of Jun.>

＊Estimates by HCM

＊Ex-Works base

(K units)

《Topics》

For plant facilities/large projects

Received order for large crawler cranes from Dubai (6 units, approximately ¥800 million)

Dubai Construction Site

[Russia] Uncertain outlook affected by the situation revolving around Ukraine etc.

(Demands for the full fiscal year forecasted to decrease by approximately 10%)

[Middle East] With the presidential election around the corner, Turkey’s market is uncertain.

Saudi Arabia, UAE, Qatar and etc. have strong demands mainly for infrastructure projects.

’09 ‘10 ‘11 ‘12 ‘13 ‘14

13 <Mining Machinery>

Demand Trend for Ultra-large Hydraulic Excavators (100t<EX1200> and over)

0

100

200

300

400

500

1st

half

10

2nd

half

10

1st

half

11

2nd

half

11

1st

half

12

2nd

half

12

1st

half

13

2nd

half

13

1st

half

14

Demand Trend by Region

Ultra-large Excavators

Trucks

0

500

1000

1500

2000

2500

3000

3500

1st

half

10

2nd

half

10

1st

half

11

2nd

half

11

1st

half

12

2nd

half

12

1st

half

13

2nd

half

13

1st

half

14

Africa M. East

Asia

China

Oceania

Eur. Russia CIS

N. America

L. America

(Units) *100t and over

*Estimates by HCM

*Estimates by HCM

*Estimates by HCM

*Estimates by HCM

(y-o-y)

(y-o-y)

*55tt and over

-100%

-50%

0%

50%

100%

0

600

1,200

1,800

2,400

FY09/1Q

2Q

3Q

4Q

FY10/1Q

2Q

3Q

4Q

FY11/1Q

2Q

3Q

4Q

FY12/1Q

2Q

3Q

4Q

FY13/1Q

2Q

3Q

4Q

FY14/1Q

2Q

-100%

-50%

0%

50%

100%

0

200

400

600

FY09/1Q

2Q

3Q

4Q

FY10/1Q

2Q

3Q

4Q

FY11/1Q

2Q

3Q

4Q

FY12/1Q

2Q

3Q

4Q

FY13/1Q

2Q

3Q

4Q

FY14/1Q

2Q

※Truck demand in the chart below was revised to indicate data for trucks with the loading weight of 55t or more.

Demand Trend for Mining Dump Trucks (55t<EH1100> and over)

(Units)

Asia

China

Oceania

Eur. Russia CIS

N. America

L. America

Africa M. East

◇ Resource prices remain sluggish (iron-ore, coal)

◇ Mining machinery demand decreased over approximately 20% year-on-year,

recovery may start in 2015 or later.

(Units)

(Units)

14

On July 9, Prime Minister Shinzo Abe visited the West

Angelus Mine in the Pilbara District of Western Australia,

along with Prime Minister Tony Abbott (Australia), during his

tour of 3 countries in Oceania.

The mine is managed by Rio Tinto, the major resource

company, and 9 units of our ultra-large hydraulic excavators

(EX5600×1, EX5500×3, EX3600×3, EX2500×1, and

EX1200×1) are in operation.

Displaying our machinery in operation at the mine to both

leaders was a great opportunity to obtain publicity for Hitachi

Construction Machinery.

≪Topics≫

Perth

Brisbane

Sydney

Photo: Prime Minister Shinzo Abe (center) and Prime Minister

Abbott (left) visiting the West Angelus Mine.

(Photo is extracted from "the Prime Minister's Office Website")

Prime Minister Abe visited an iron mine in Western Australia

Port Hedland

West Angelus Mine

Perth

© Hitachi Construction Machinery Co., Ltd. 2014. All rights reserved.

Public Relations Strategy office

For further inquiries:

ＥＮＤ

TEL : 03-3830-8065

FAX : 03-3830-8224

Hitachi Construction Machinery Co., Ltd