FY16-2Q

Company Outline

and

Topics

© Hitachi Construction Machinery Co., Ltd. 2016. All rights reserved.

2016

Public Relations Strategy Office

2

・Company Name Hitachi Construction Machinery Co., Ltd.

Stock Exchange Listings：Tokyo (#6305)

・Major Operations Manufacturing , sales and service of construction machinery,

transportation machinery, and other machines and devices.

・Established 1 October, 1970

・Capital 81,576 million Yen (Hitachi, Ltd：51%)

・President Yuichi Tsujimoto

・Subsidiaries &

Affiliates

Japan: 15 companies, Overseas: 40 companies

・Number of Employees Consolidated :21,193 Non-consolidated :4,315

Company Outline

(March 31, 2016)

3

Construction

New Machine

and others

71%

Construction

Parts &

Services

14%

Mining

New

Machine

6%

Mining

Parts &

Services

9%

Double-Front Work

Machine

Hydraulic

Crawler Crane

Wheel-drive Type

Hydraulic Excavator

Mini excavator

Road

Construction

Machinery

Our Products and Revenue

Wheel Loader

Hydraulic Excavator

(Hybrid hydraulic excavator,

ICT hydraulic excavator)

Mining

Construction

Solution Business

Dump Truck Ultra-large Hydraulic Excavator

Consite Mine management system

FY2015 Revenue

758.3

(Billions of yen )

4

81.6

0

20

40

60

80

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

'70 '72 '74 '76 '78 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14

Overseasrevenue

Domesticrevenue

Overseasrevenue ratio

（ Billions of yen ） （％）

“Made in Japan”

main

Localizing Manufacturing

‘85 Plaza Accord

‘91 the bursting of

the Japan’s bubble

economy

‘97 Asian

Financial Crisis

‘08 the collapse of Lehman Brothers

‘15

Globalizing and Localizing Manufacturing

Europe &

America China Sales network

covering the Europe,

3.8 22.2 21.4 Capital（ Billions of yen ）

Main business: Jpan Expansion of

overseas business

Mini excavator

Wheel Loader Dump truck

1,000

900

800

700

600

500

400

300

200

100

0

5

The Americas

Manufacturing:3

Sales:4

EMEA※

Manufacturing:1

Sales:5

Southern Africa

Manufacturing:1

Sales:4

India

Manufacturing:1

Sales:1

China

Manufacturing:2

Sales:4

Asia

Manufacturing:1

Sales:5

Oceania

Sales:1

Japan

Manufacturing:5

Sales:1

Russia＆ CIS.

Manufacturing:1

Sales:1

HCM’s Manufacturing & Sales Bases (Major group companies)

※Europe Middle east and Africa

6 6

AC-3 rigid dump truck

・The synergy of Hitachi Group ・High-Performance Stability Control Technologies

≪Topics≫AC-3 rigid dump truck

Clarion Co., Ltd.

Infrastructure Systems Company, Hitachi Ltd.

Hitachi Research Laboratory, Hitachi, Ltd.

Power Systems Company,

Hitachi Ltd.

Power Systems Company,

Hitachi Ltd.

Infrastructure Systems

Company, Hitachi Ltd.

Hitachi Power Solutions Co., Ltd..

7 7 ≪Topics≫AC-3 rigid dump truck

AWARD - JSME(The Japan Society of Mechanical Engineer)

Medal for New Technology 2014,

We received JSME Medal for New Technology 2014 from The Japan Society of

Mechanical Engineers for “High-Performance Stability Control Technologies” installed in

the new AC-3 dump truck series.

The technologies were “Pitching restraint control” and “Sideslip prevention control”. The

former reduces pitching of the truck, resulting in better operating comfort and fewer load

spillage. The latter prevents sideslip of the truck, resulting in enabling stabilized operation

under various road conditions including slippery rutted surfaces. This award was highly

evaluated these two technologies.

Pitching restrain control

Sideslip prevention control EH5000AC-3 dump equipped with

”High-Performance Stability Control Technologies"

Without control

Without

control

With

control

With control

8 8 ≪Topics≫Fleet Management System/ Autonomous dump truck

Mining operations management system through use of the Fleet Management System (FMS)

for managing mining operations from the successful Wenco International Mining Systems

Ltd.

Currently conducting verification testing on autonomous (unmanned) dump truck driving

systems.

9 9 ≪Topics≫Solutions that resolve customer issues

We will build networks of the various personnel involved with construction equipment and

work sites using ICT to provide accurate and efficient processes.

Customer issue (1)

safety

Visualizing peripheral

Information for machinery

Expanding the on-board

“Aerial Angle” product that

displays peripheral information

for machinery on a monitor

inside the cab

Customer issue (2)

productivity

[mining]

Optimization of the operation

process

Mining operations

Management system through

use of the Fleet Management

System (FMS) for managing

mining operations from the

successful Wenco International

Mining Systems Ltd. Currently

conducting verification testing

on autonomous (unmanned)

dump truck driving systems

Customer issue (3)

productivity

[civil engineering works]

Use of information and

communication technologies

(ICT) adapted to customer

needs on work sites

Compliance with the

“i-Construction” platform

promoted by the Ministry of Land, Infrastructure, transport

and Tourism since FY2016.

Expanding solutions from

a customer perspective

Customer issue (4)

Life-cycle cost

reductions

Visualization of construction

equipment operating condition

and predictors of malfunction

Staying on top of malfunction

predictors and reducing machine

down-time through thorough

standardization of servicing

via the “ConSite” remote

monitoring system

i-Construction the ICT hydraulic excavator

The “ZX200X-5B” comes equipped with

HCM’s proprietary machine control functions

and machine guidance functions that

navigate the operator, and complies with the

“i-Construction” initiative promoted by the

Ministry of Land, Infrastructure, Transport

and Tourism. 「ZX200X-5B」

10 10

Overview of the Transaction

Acquisition price

A$ 3.25 per ordinary share (a 37.7% premium to the 1 month VWAP of Bradken shares up to 30 September) Maximum total consideration of A$ 689 million (JPY 51.6 billion JPY75=A$)

Acquisition structure

A cash takeover offer for 100% of the ordinary shares

Source of funds Existing cash reserves and external funding

Anticipated schedule*1

1 Nov. 2016: Commence takeover bid

10 Feb. 2017: Complete takeover bid

Overview of Bradken

Name Bradken Limited

Business Casting, manufacturing and distribution service of casting products

Representative Paul Zuckerman (CEO)

Headquarters Newcastle (NSW), Australia

Established 1922

No. of employees Almost 3,500

Stock listing Australian Stock Exchange (ASX: BKN)

*1 The schedule is subject to extension

Key Financials Share Performance

1,008

1,154

1,4561,317

1,138

968

82116.6% 17.0%

15.1%16.2%

15.2%14.1%

13.2%

8.0%

12.0%

16.0%

20.0%

24.0%

28.0%

0

200

400

600

800

1,000

1,200

1,400

1,600

FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016

Revenue EBITDA margin

(A$ million) (A$)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

0.0

2.0

4.0

6.0

8.0

10.0

12.0

'10 '11 '12 '13 '14 '15 '16

Share price S&P/ASX 200 Index

≪Topics≫Acquisition of Bradken

11

High-precision wear parts for

mobile mining equipment

Revenue：A$228.4mm

% total revenue：27.8%

Global leader in crawler systems,

GET

Crawler systems

GET（Ground Engaging Tools）

Industrial product for infrastructure

Mining wear parts business Specialty castings

business

Wear surface solutions for fixed

plant mining equipment

Revenue：A$349.5mm

% total revenue：42.6%

Global leader in metallic mill

liners

Metallic mill liners

Wear surface solutions

Live, remote wear monitoring technology

High-spec, specialty castings for

the industrial, energy and

defence industries

Revenue：A$227.2mm

% total revenue：27.7%

Customized specialty castings

Industrial

Energy

Defence

* Revenue and % Total Revenue based on 2016/6A.

In addition to these three businesses, Bradken’s total revenue includes Cast Metal Services (A$13.9 mm, 1.7%), Others (A$1.6mm, 0.2%).

≪Topics≫Core Products and Solutions of Bradken

12 12

Australia/NZ

North America

South America

Africa

Europe

SE Asia

China

Coal

Iron Ore

Copper

Gold

Other Minerals

Oil & Gas

ConsumableProducts

CapitalProducts

Resources

Non-Resources

REVENUE BY INDUSTRY SECTOR REVENUE BY PRODUCT

Strong presence in the resources sector

Consumable products account for c.

90% of total revenue

REVENUE BY REGION REVENUE BY COMMODITY

Strong presence in Australia and North America

Well-balanced exposure to commodities

Note: Revenue for FYE 2016/6.

15.3%

84.7%

10.6%

89.4%

45.0% 44.1%

2.9%

2.7% 2.6%

0.2% 2.5%

23.7%

19.2%

18.8%

18.1%

11.7%

8.5%

≪Topics≫Overview of Bradken～Revenue Breakdown～

13 13

Parts & services Used Rented New Equipment sales Client operation enhancement

Source: Off-Highway, Freedonia, Company Reports, IRN, Expert Interview, Team Analysis, Parkerbay, Capital IQ

@ US$1=JPY120 in 2014

≪Topics≫ Strategy to Strengthen HCM’s Value Chain

The potential market size will double through initiatives to develop the entire value chain, rather than widening the product lineup.

*1: Mining shovels, mining RDTs, mini shovels, wheel loaders, medium-sized shovels

Max. JPY24tn

Other product group

Increase revenue and

profitability through value

chain expansion with core

products (e.g. shovels)

Broadening of “Business Portfolio”

Competition in

increasing product lineup

Market Size of Core Product Group in Construction & Mining Machinery

Core product group*1

Bro

ad

en

ing

of

“G

oo

ds

”

Mining SHs

Mining Dump

Trucks

SHs

WLs

Mini SHs

Enter business of

client operation

enhancement using

IoT

ADTs

Backhoe

Loaders

Motor

Graders

Skid Steer

Loaders Max. JPY10tn

Max. JPY 9tn

14 14

Operation Services

Software & IoT

Parts

Hardware

Services

Goods

≪Topics≫ Future Growth Outlook V

alu

e C

hain

▪ Geological modeling companies

▪ Mine planning companies

▪ Field monitoring companies

▪ Maintenance planning companies

▪ Asset management companies

Fleet management

Growth Strategy

Parts supplier

Surface mining field operation

Accumulation & crush

Reinforce after-sales services business by acquiring parts suppliers in a fragmented market with many small-scale suppliers

Reinforce IoT capability through Wenco (the #1 fleet management company) as a core. Improve productivity (including planning) based on data integration

Accumulate operating know-how and data by forming alliance with operators (including mining companies). Provide solutions for productivity enhancements using IoT

HCM Strategic Field

Hardware supplier

Step 3

Step 2

Step 1

Mining companies & operators

Business strengthened by the acquisition

The acquisition of Bradken will enable HCM to provide comprehensive solutions for client productivity enhancements; a stronger after-sales business with Bradken at its core service parts supplier and effective utilization of software and IoT.

Acquire solid business field by enhancing the value chain

Extraction & transportation

15 15

Combined Market of Parts & Services

Genuine Products Non-branded Products

Landscape of Construction & Mining Machinery Parts & Services Market

≪Topics≫ Anticipated Synergies① Enhancement of Value Chain through Reinforcement of the Mining Wear Parts Business

The acquisition of Bradken will not only raise the capture rate of mining wear parts used in our

own construction machinery, but also raise those in our competitors’ machinery.

HCM genuine products

for HCM machinery

【Hardware manufacturer

(HCM)】

【Hardware manufacturer

(other companies)】

Market for genuine products

manufactured by HCM

competitors

(HCM unable to capture)

Non-branded products

for HCM machinery

【Parts manufacturer (Bradken)】

Market for non-branded

products

(Bradken already in market)

【Parts manufacturer (Bradken)】

Oth

er

OE

Ms

HC

M

Capture Rate: High

Market for non-

branded products

【Parts manufacturer

(other companies)】

Competitor’s share of

non-branded products

for HCM machinery

【Parts manufacturer

(other companies)】

Capture Rate: Low

・・

・

・・

・

Penetrate parts & services business of

competitors

Increase capture rate

Pu

rsu

e s

yne

rgy

Pu

rsu

e s

yne

rgy

16 16

Expansion of global customer coverage through the combination of the HCM and

Bradken brands

* HCM: Based on the operating unit shares of operating mining equipment. Bradken: Based on units implied by market share by revenue

≪Topics≫ Anticipated Synergies②Expand Customer Coverage

【Customer coverage by

region※】 N. America S. America Europe Africa Asia Oceania

HCM New

Equipment

Bradken

GET -

Mill Liners

Solid customer platform through new

equipment sales based on

production technology cultivated

over years and continuous

innovation

Broad customer platform based on

wide value chain comprised of

mining facility, mining consumable

and maintenance service

businesses

etc. etc.

Expanding the

customer coverage

through the proven

brand value

17 17

Upgrade productivity Reduction of life cycle cost Improve safety

Bradken’s Strength

Competitive mining consumable products

Ability to respond to sophisticated

customers’ needs

Superior casting technology

Experienced management team

Brand value based on established

relationship with customers

HCM’s Strength

New Equipment development capability

Production technology cultivated over

years

Continuous innovation (ICT・IoT, hybrid)

Large operating fleet based on high

reliability and durability

Brand value based on established

relationship with customers

Consolidated

revenue

JPY 758bn*1

Consolidated

revenue

A$821mn *1

Provide solutions to

customers

Synergies Synergies

≪Topics≫ Anticipated Synergies③Accelerate Innovation

Combining Superior Technology, Product Capability and Operational Know-How

*1 HCM: 2016/3A; Bradken: 2016/6A

18 18 ≪Topics≫ Corporate governance systems

(as of October 12, 2016)

8 D

irecto

rs

(of w

hom

3 a

re O

utsid

e D

irecto

rs)

15

15

19

END

2016

Public Relations Strategy Office

Corporate Vision

© Hitachi Construction Machinery Co., Ltd. 2016. All rights reserved.

Any forward-looking statements in the “Corporate Vision” , including

results forecasts, are based on certain assumptions that were

deemed rational as well as information currently available to the

Company at this time. However, various factors could

cause actual results to differ materially.