I'm Hosotani, the CFO. First of all, I'd like to address what happened the other day, which was an earthquake that originated in Kumamoto Prefecture, and I'd like to explain, extend my condolences to the people who were affected. We have been able to confirm the safety of our people. The operations of our facilities and so forth. We are currently in the midst of the confirmation process. We would like to extend our prayers for early recovery. Now, I'd like to explain the first quarter business results for the first three months ended June 30th, 2026. Page 4 shows the highlights for the first quarter of fiscal 26. FX rates were 158.5 yen to the US dollar, 184.6 yen to the euro and 112.6 yen to the Australian dollar. Compared to the same period of the previous year, the yen depreciated against the US dollar, the euro and the Australian dollar. Net sales increased by 14.7% year-on-year to 1,043.1 billion yen. Operating income increased by 8% to 151.6 billion. The operating income ratio was 14.5%, down 0.9 percentage points year-on-year. Net income increased by 5.4% year-on-year to 96.2 billion yen. Net sales reached a record high for a first quarter. Page 5 shows segment sales and profits for the first quarter of fiscal 26. Net sales of construction, mining, and utility equipment increased by 14.4% year-on-year to 956.9 billion yen. Segment profits increased by 6.4% to 130.1 billion yen, and the segment profit ratio decreased by 1 percentage point to 13.5%. Sales of retail finance increased by 7.4% year-on-year to 32.7 billion yen and segment profits increased by 2.8% to 9.6 billion. Sales of industrial machinery and others increased by 21.7% year-on-year to 52.9 billion yen and segment profit increased by 25.1% to 9 billion yen. I will explain the factors behind changes for each segment later. Page 6 shows sales by region for the construction, mining and utility equipment segment in the first quarter of fiscal 26. Sales of construction, mining and utility equipment increased by 14.6% year-on-year to 965 billion yen. Excluding SX impact, sales increased by 3.7% year-on-year. Details of changes by region will be explained on the following pages divided into mining and construction equipment. Page 7 shows sales by region for mining equipment within the construction, mining, and utility equipment segment for FY26Q1. Sales of mining equipment increased by 13.8% year-on-year to 462.4 billion yen. Excluding FX impact, sales increased by 2% year-on-year. In Asia, sales decreased significantly in Indonesia due to sluggish demand for coal, but in Latin America, sales increased sharply due to solid demand for copper mines, and sales for oil sands in North America also increased, resulting in an overall increase in sales. K-Date shows sales by region for construction equipment within the construction, mining, and utility equipment segment for the first quarter of fiscal 26. Sales of construction equipment increased by 15.3% year-on-year to 502.6 billion yen, excluding foreign exchange effects Sales increased by 5.3% year-on-year. While sales decreased in Japan due to a decline in public works and in the Middle East affected by the situation in the region, overall sales increased as non-residential demand such as data centers and rental demand remained solid in North America and demand expanded in Latin America, driven by public investment. Page 9 shows the factor behind changes in sales and segment profit for the construction, mining, and utility equipment segment in the first quarter of fiscal 26. Sales increased by 122 billion yen year-on-year driven by positive FX impacts from the weaker yen, higher sales volume, and improved selling prices. Segment profit increased by 7.9 billion yen year-on-year as positive impacts from the weaker yen, higher volume, and improved selling prices outweighed negative factors such as product exchanges and cost increases. The Zecna profit ratio decreased by 1 percentage point year-on-year to 13.5%. The tariff impact for Q1 of fiscal 26, including refunds, was a negative impact of 11.7 billion yen Included in production costs. Page 10 shows the situation for retail finance in the first quarter of fiscal 26. Asset increased from the previous fiscal year end due to an increase in new contracts and the impact of the weaker yen. New contracts increased year on year, mainly due to higher finance penetration in North America, Europe, Oceania, and Africa. Sales in segment profit increased by 2.3 billion yen and 300 million yen year-on-year, respectively, primarily due to the weaker yen and an expansion in assets. Page 11 shows sales in segment profit for the industrial machinery and other segments in the first quarter of fiscal 26. Sales increased by 21.7% year-on-year The segment profit ratio increased by 0.4 percentage points year-on-year to 17%. Both sales and segment profit increased overall, mainly due to higher sales of large presses for the automotive industry and increased maintenance sales of Eximer lasers for the semiconductor industry. Page 12 shows the consolidated balance sheet and free cash flow. Total assets stood at 6,782,000,000 yen, an increase of 358.6 billion yen from the previous fiscal year end, mainly due to increases in cash and deposits and inventories. Inventories were ¥1,715.2 billion, up ¥113.3 billion from the end of the previous fiscal year, partly affected by the weaker yen. The shareholders' equity ratio fell by 2.9 percentage points from the end of the previous fiscal year to 51.8%. The net PE ratio was 0.3. Free cash flow for the first quarter of fiscal 26 was an outflow of 1.6 billion yen. For the full year of fiscal 26, free cash flow is projected to be an inflow of 260 billion yen. This concludes my presentation.

Next, Hishinoma, General Manager of Business Coordination and Department, will explain the FY26 Business Results Projection This is Hishinuma. I will explain the projection for fiscal 2026 business results and the status of major markets. Page 14 outlines the projection for FY2026. We have made upward revisions to the April 28 sales and profit projection reflecting revised assumptions of the lily situation and U.S. tariffs. and the latest market outlook. The drop in demand in some regions resulting from the military situation is expected to be less than anticipated and also U.S. tariff rates were partially revised thereby reducing the impact. Sales will increase by 4.1% year-on-year to ¥4,302,000,000 revised upward by ¥184,000,000 from the April projection. Upgrading income will decrease by 2.2% to 555 billion yen year-on-year revised upward by 47 billion from the April projection. Net income will decrease by 7.3% year-on-year to 349 billion yen revised upward by 31 billion yen from the April projection. Demand projection has been partially revised. This will be explained later. Exchange rate from the second quarter will be 150 yen to the U.S. dollar, 174 yen to the Euro, and 106 yen to the Australian dollar unchanged from the April projection. Full year average rates are 152.1 yen to the U.S. dollar, 176.6 yen to the Euro, and 107.6 yen to the Australian dollar. FY26 ROE is expected to be 10.1%. Cash dividend per share 190 yen unchanged from the April projection. The consolidated payout ratio is projected to be 48.6%. Page 15 summarizes the Middle East situation and U.S. tariffs impact incorporated into the fiscal 26 projection along with the underlying assumptions. First, the impact of the situation in the Middle East. At this time, regarding the impact of the Strait of Hormuz blockade, we are using alternative shipping routes, although some delays observed in local projects. Delivery is expected to continue and the impact on sales is projected to be less than initially anticipated. Additionally, the impact of declining demand in certain African countries and Southeast Asia due to soaring crude oil prices remains limited at this time. On the cost front, there have been no significant changes from initial assumptions regarding the rising procurement costs of petroleum-based materials. However, due to factors not factored in the previous forecast, such as increased shipping costs from Japan and additional expenses associated with changes in shipping routes, the impact on cost increases is expected to exceed initial projections. We revised our Middle East-related sales decline projection 46.3 billion yen and a cost increase of plus 23.2 billion yen. Next, regarding the impact of US tariffs. We have revised the tariff rate on steel and aluminum from 25% to 15%. We have also factored in the impact of additional Section 301 tariffs that took effect in July. As a result, we have revised the impact of cost increase due to US tariffs to plus 25.8 billion yen. Please note that these projections are estimates based on the current situation as the impact amounts may fluctuate significantly depending on future developments. We will continue to closely monitor the situation. Page 16 represents the segment sales and profit projections. Construction, mining and utility equipment is projected to increase by 4.3% year-on-year to 3.97 trillion yen Segment profit is expected to decrease by 2.1% to 481 billion yen Retail finance sales is projected to increase by 1.9% year-on-year to 128.5 billion yen Segment profit will decrease by 0.2% to 36.5 billion yen Industrial machinery and other sales will increase by 5.5% year-on-year to 252 billion yen. Segment profit is expected to increase by 9.4% to 41.5 billion yen. I'll explain the factors contributing to the changes in each segment later. Page 17 shows projections for sales by region for the construction, mining, and utility equipment for FY2026. Sales are projected to increase by 4.0% year-on-year to 3,949.4 billion yen. Excluding the impact on foreign exchange rates, sales are expected to increase by 2.1% year-on-year. Details of gains and losses by region will be explained on the following pages broken down by mining and construction equipment. Page 18 shows the mining projection for sales by region for FY2026. Sales of mining equipment are projected to increase by 2.1% year-on-year to ¥1,944.7 billion. Declines in sales in Asia due to sluggish coal demand and in the Middle East due to regional situation will be offset by increases in sales in Latin America where copper mining demand is strong and in Africa where gold mining demand is strong, excluding for an exchange impact Sales are projected to be virtually unchanged at minus 0.3%. Page 19 shows the construction equipment projections for sale by region for fiscal 2026. Sales is projected to increase by 6.0% year-on-year to 2.047 trillion yen. Excluding foreign exchange effects, sales are expected to rise by 4.5% year-on-year. Despite expected sales decline in the Middle East and Asia, due to the situation in the region, sales is projected to increase, supported by solid non-residential and rental demand in North America, public investment in Latin America, and solid demand for medium-sized construction equipment for gold mining in Africa. Page 20 outlines the factors behind changes in sales and segment profit for construction, mining and utility equipment. Sales expected to decrease by ¥164.0 billion year-on-year, driven by the positive effects of the weaker yen, higher sales volume, and improved selling prices. Segment profit is expected to decrease by ¥10.1 billion year-on-year, despite the positive effects of the weaker yen, higher sales volume, and improved selling prices, due to the negative impact of factors such as impact of higher tariffs and rising procurement costs. The segment profit ratio is projected to decline by 0.8 percentage points year-on-year to 12.1%. Page 21 presents the outlook for retail partners. Assets are projected to increase by 46.4 billion yen compared to the end of the previous fiscal year driven by growth in new contracts. New contracts will increase by 63.3 billion yen year-on-year, driven by higher utilization of financing in North America, Europe, Australia, and Africa. Sales will increase by 2.4 billion yen year-on-year, primarily due to the expansion of assets. Segment profit is expected to remain at the previous year's level, primarily due to higher costs. Our rate is projected to decline by 0.1 percentage points over year-on-year to 2.3%. Page 22 shows segment sales and profit projections for industrial machinery and others. Sales increased by 5.5% year-on-year to 252 billion yen. while segment profit is projected to rise by 9.4% year-to-year to 41.5 billion yen. While automotive industry sales are expected to decline primarily due to lower large press sales, sales to the semiconductor industry are expected to increase due to customers' increased production as a result overall sales and profit are projected to rise. Segment profit ratio is projected to rise by 0.6% to 0.7% You are near to 16.5%. And starting on page 23, we will explain the demand trends and outlook for the seven major projects. The unit demand figures for the seven major projects include mining. The figures for FY26 first quarter are preliminary estimates from the company. Unit demand for FY26 Q1 appears to have increased by 12% year-on-year Following the trend from the fourth quarter of the previous fiscal year, demand remained robust and in the other regions category, demand growth was driven by Africa supported by strong demand for gold mines and Latin America where demand for copper mines and public investments remained solid. Furthermore, While our demand forecast as of April had factored in a decline in demand in the Middle East and neighboring countries due to the situation in the region, demand in these areas is currently exceeding initial expectations. Taking these circumstances into account, we have revised our full-year demand forecast for FY26 to a year-on-year range of 0 to plus 5%. PACE24 shows demand trends and forecasts for North America market. Demand volume for FY26Q1 appears to have increased by 11% year-on-year. The demand from non-residential sectors such as data centers and the rental market remain robust. We have revised our full year demand forecast for FY2026 from the April forecast to a range of 0 to plus 5% year-on-year. We expect non-residential and rental sectors centered on data centers to continue driving demand. Phase 25 shows a demand trend that forecasts for the European market. Demand for FY26Q1 appears to have increased by plus 4% year-on-year. We have not revised the full-year demand forecast at this time, but we will closely monitor future developments, including the impact of the ECB's interest rate hike in June on construction equipment demand. May 26th shows demand trends and forecasts for the Asian market. Demand for the first quarter of fiscal year 2026 appears to have increased by 4% year-on-year. In Indonesia, while demand from the coal money sector remains sluggish, Due to future uncertainty, demand from the agricultural sector including food estate projects have grown up. And furthermore, regarding other Asian countries, we have anticipated that rising energy prices caused by the situation released would trigger economic slowdowns and lead to a decline in construction equipment demand. However, the actual decline in demand has not been as significant as expected. In India, demand for construction equipment remains robust, supported by public growth projects and economic growth. Taking these circumstances into account, we revised our full-year demand forecast for FY26 from the April projection to a range of 0-5% year-on-year. Page 27 shows demand trends and forecasts for the Japanese market. Demand volume for the first quarter of fiscal year 26 appears to have decreased by 11% compared to the same period last year. Although we have not revised the full year demand forecast, the number of public works projects continues to fall below the last year's level and we will closely monitor future developments. Phase 28 shows trends and forecasts for the prices of major minerals related to mining equipment demand. Copper prices remain high, supported by robust demand, while kick gold is currently undergoing a temporary correction and is expected to remain at high levels going forward. Fuel coal prices for both low-grade and high-grade coal are currently trending upward, partly due to soaring energy prices caused by the Middle East situation. We will continue to closely monitor developments. Page 29 shows the transit demand for mining equipment. Unit demand for the first quarter of FY26 appears to have decreased by 12% year-on-year. Overall demand fell significantly due to a sharp decline in demand for coal-related machinery in Indonesia. On the other hand, demand for copper mines in Chile and gold mines in Africa has remained robust, and overall demand for mining equipment is expected to exceed initial projections. Taking these circumstances into account, we have revised our full-year FY26 demand forecast from April projections to a year-on-year decline of 5% to 10%. Stage 30 shows the sales forecast for the construction, mining, and utility equipment, including equipment, parts, and services. In the first quarter of FY26, parts sales increased by 18.4% year-on-year to 286.5 billion yen. The aftermarket including services accounted for 54% of total sales, and total aftermarket sales including the impact of foreign exchange rates increased by 5% year-on-year. For FY2026, parts sales are projected to increase by 4.2% year-on-year to ¥1,099,9 billion. The aftermarket segment including parts, services and other items is expected to account for 52% of total sales and aftermarket sales excluding current exchange effects are projected to increase by 2.9% year-on-year. Next, I will explain the main topics.

I am on page 43. Over many years, Komatsu has accumulated equipment operating data, construction data, and job site expertise through contracts, smart construction, and other solutions. Based on these assets, we have gradually advanced AI usage across regions and businesses, and we have now strengthened our organization to accelerate global AI adoption, launching full-scale deployment across the entire value chain, from R&D and manufacturing to sales and service. Going forward, we will further accelerate these initiatives to drive operational transformation and customer value creation across our global value chain. Next, turning to page 44. Kumwata has begun deploying its Smart Construction Digital Job Site Management solution for Changi Airport Terminal 5 construction project, a major national infrastructure development in Singapore. By introducing advanced solutions, We enable real-time tracking of construction volume, smooth data sharing between machines, and project management utilizing construction data, contributing to improved job site efficiency and prompt decision making. Next, on page 45, Komatsu and the Appalachian Williams F1 team launched the Komatsu Williams Engineering Academy in 2024 to nurture next-generation engineers. We have now launched the third term and will strengthen collaboration with Formula Students, a premier engineering competition for university students. I'm on page 46 now. Komatsu has issued green bonds through a public offering in the domestic market. Proceeds raised from this issuance are planned to be allocated towards expenditures related to the rebuilding of Komatsu's new headquarters building currently underway. From an environmental performance standpoint, The building adopts a design that reduces CO2 emissions obtaining ZEV Ready certification in April 26. The location to the new headquarters building is scheduled for January 2027. That concludes my presentation. Now we would like to move on to the Q&A session. Now we would like to take the first question. My call from Nomura, please. This is my call from Nomura Securities. Thank you very much for the presentation. I have two questions. Regarding your demand outlook, as well as your full year, volume, expectations, you have revised it up. Regarding this, in the last three months, what kind of changes were observed? Originally, the risk related to the Middle East was accounted for. and I think you were a little bit conservative in your sales and demand expectations. I guess the risks didn't materialize as much, is that the case? Or for North America and Latin America, inclusive of mining, apparently first quarter progress was quite good. So is it the other areas where you were able to see base demand improvement? So can you share that with us first? This is Ashishi Numa speaking. Regarding the impact from the Middle East, as you rightly said, the impact wasn't as substantial, so that has been accounted for. And also by geography, we talked about it in the presentation, but North America was solid due to demand from data centers and rental demand was brisk as well. By geography, we talked about this in the presentation, but for North America, Q1 alone, demand increased Exceeding 10%. And other regions, there were a lot of regions that grew positively. There were some regions like Japan that went down substantially, but all in all, there were many regions that trended positively. And for Asia, we were expecting some impacts from the Middle Eastern circumstances. I wouldn't say it was zero, but for the Philippines as well as Malaysia, there were some regions that were affected by fuel or oil prices. However, there were some offsets that led to the updated guidance or results. And for the mining business, it is hard to predict by demand. So when we talk about the overall picture, we talk about trends in commodity prices and also we look at capex plans by mining measures. We often explain in that regard. So for when it comes to sales impact, It's about when the deliveries are going to materialize and there are some timing changes. So it's really hard to explain the lining of this just based off demand. However, copper continues to be strong as we have been communicating from before. But what was positive on sales actually came from gold in Africa, that is. that positively affected our mining business as well as some middle-sized construction equipment that are utilized at gold mines. Thank you very much. I have two follow-up questions. For North America in Q1, apparently demand was quite strong and I think sales grew as well for the full year. The growth rate apparently is a little bit smaller, but was it by chance that Q1 was good for North America and for Asia? I might be looking at the wrong slide, but when you look at demand, you have been revising it up, but for sales expectations, I think you have been revising it down instead. So for Asia, are there some differences in how you view demand and sales? You were saying some regions performed well. So, can you give us more flavor on North America as well as Asia? So, for North America, year over year, when you do the comparisons, as you can see on the screen, comparing it against 2221 and benchmarking against that year, You could see how 2026 was, and we were at 100 degrees. But in the previous year, as well as the year before last, which was in 24 and 25, it was quite low. Percentage-wise, it trended high somewhat. However, it is true that the business continues to be brisk, so we are expecting a positive projection. And for Asia, Indonesia accounts for a large part of sales, but in Indonesia, coal demand continues to be sluggish. Therefore, we are expecting further deterioration, and that has led to these projections. I see. Thank you very much. My second follow-up question is about the impact on profits from a tariff point of view. In Q1 this year, I think it's going to be an absence leading to a reactionary fall. But for steel and aluminum, compared to your original expectations, It went down to 88.3 billion cents and it's effective from June the eve so due to inventory impact I guess the impact is not accounted for for the full year so there should be some lower impacts from steel and aluminum going Thank you. This is Hosotani, CFO for Tariff. As of April, we were saying $30 billion for refunds. It is suddenly underway right now. And in reality, for the refunds that have materialized in the U.S., the full amount received doesn't hit the P&L, but demand continues to be solid, and this time around, for Q1, approximately close to $10 billion has already been refunded. That directly has affected the P&L. On the other hand, there has been some changes in tariff rates. For steel and aluminum tariffs, 25%, especially for Japan, has been reduced to 15%. So this gain has been accounted for in the guidance. On the other hand, for the increases as of April, Section 122 at 10%. In the latter half of July, it was something that expired, but when we were making the guidance in April, we weren't sure what was going to happen after 122, so we assumed 10% tariff rates. And due to The announcement by the US, it was replaced by 301, and 10% became 15% instead. That led to higher tariff costs. But the impact is not material. That's what we are viewing. And in our updated outlook, we have accounted for all the impact we're expecting from tariffs. Thank you. If that's the case, for refunds, you're planning for $30 billion and that hasn't changed but in the Q1 it was $10 billion and for the second and third quarters the remaining $20 billion or more should accordingly hit your performance and for steel and aluminum for that part the 25% to 15% for next fiscal year is that going to be a positive impact because there are some The first question was about refunds, but compared to the initial pace that we were assuming, actually the refunds are being carried out faster than expected, so we are expecting $30 billion for the full year. Also, on the other hand, for steel and aluminum, We were assuming 25% in April which went down to 15%. And the inventory where we were assuming at 25%, we weren't really assuming that this inventory was going to be outstanding next fiscal year. So no. So half of the impact for 25% is this year and the other half is for next fiscal year. The fact that 25% went down to 15%, excuse me, let me correct myself. You mean the gain portion, when that's going to hit? Regarding how much is going to be carried over to next fiscal year, unfortunately, I'm not able to give you clear guidance at this moment. Thank you. I see.

Thank you very much. And next question, please. UPS Security, South Pakistan, please. Can you hear me? My name is Sasaki from UBS Securities. We can hear you, yes. Well, again, I have two questions, if I may, first. Well, they are both related to new plans. First is slide number 20 on page 20. You talk about the gains and losses in ZDF. Well, yes, you increased the volume, I understand that, but about the selling price and The selling price, it was $689 initially, but it's $646. So what's the reason for this difference? And also, the production cost difference. In the Middle East, the logistical change, I do understand that, but still, it's an increase of $3 billion. Well, the cost has gone down by $3 billion. But in the earlier slide, you said The CAF class is $12 billion, and the shipping class increase in the Middle East is $4.4 billion. So, plus minus, it seems that there's an additional $3 to $4 billion. So, I want you to explain about this. So, that's my first question please. Hosotani here. About your question. You asked me about FY26 profit and the projection. Well, three months ago, in your basic plan, on page 22, the selling price was 68.9 billion, whereas this time it appears to be 64.6 billion. So it's down by 4 billion. What's the reason for that? and also the production cost I think overall it appears to be the reduction of $3 billion but in the earlier page on page 15 you talk about the tech cost going down by $12 billion and the lease cost will increase to $4 billion so I think there should be more costs but plus minus on page 15 It seems that there are other reasons for the increase in cost. So that's the intention of my question here. Okay. About the price. The change from April is about $4 billion. Well, in some of the regions, there has been a slight adjustment in the selling price. Well, in the region, there is a card exchange fluctuation, and in line with that, we have made adjustments in the selling price. And as a result, this time, there is a slight drop in the selling price, and so that's the pricing. About the cost, well, yes. We talked about the impact of tariffs and this is all included, but other than that, what increases the cost? Against April, a much bigger cost, the steel cost. The unit price has gone up vis-a-vis what we projected in April. So there's a several billion yen increase because of the increase in steel price. So what regions are you talking about? Can you explain? Well, in some of the regions. And it's not one single country, so I really cannot respond. So, in multiple countries that is happening, right?

Yes.

Well, price adjustment. Well, we are making price adjustments as needed, observing this situation, okay? The second question, about mining sales projection. That's my second question. Well, the last time, compared to your initial plan, excluding for X, if you look at the sales trend, Asia saves initially to be about minus 15 billion, but now it's 36. So, why is Asia bad? And in Latin America, you say cloth popper is good and African gold is good, but can you explain? And Oceania too. Compared to the initial plan, you have made an upward revision in sales. So what has driven you to make such upward revisions in sales? Please. That was my second question. Thank you very much. About money, especially in Asia, Indonesia. Well, we continue to see a sluggish demand, and so I do understand that the price is $60, but the cost remains high. And also, GSI has started, and B50, So it's more than 50%, but it seems to be starting from September, so by 0.50%. So I think that this has an impact. And also, as we always talk about the idle rate, in March it was around 18%, I believe, I said. But currently the situation is quite bad. May 20% and July 19% Given this high rate, it will not lead to introducing new machines and therefore we are being conservative in terms of the projection. For other reasons, copper, gold, Yes, compared to April, things are improving, but as I said earlier, first, we have to look at the mineral prices, and it is steady, and also, the resource companies, their capital investment, again, is solid, 25, 26, 27, it's not going down, so we do understand that it will be brisk. And about our sales projections again, well we have to think about the delivery timing and therefore there will be some ups and downs in terms of the different regions. For this fiscal year, compared to our April projection, what we explained in April, compared to that, within this fiscal year, we believe that there are more machines that will be delivered within the fiscal year and so gold and copper And in terms of region, Australia, Latin America, the sales have been upward revised because of this background. Thank you. Australia. So what led you to the upward revision? Australia. Coal? I think it's coal. Thank you for the question. Let's move on to the next one.

Taninaka-san from SMBC, Nikko, please. This is Taninaka from SMBC Nikko Securities. Thank you for taking my question. I have two questions, the first one being about this time, for mining equipment and the upward revision. How much strength have you accounted for or how conservative or how achievable are the plans In Latin America, excluding SX impact, I think it grew by 24% for Q1. And if you exclude SX, the growth is likely to be only 6% from the original 2% for the year. For North America, it grew by 10% for Q1, but it was minus 1% for the year, but you only changed it to flat year over year. So when you look at the growth in Q1 alone, The single-digit percentage growth you are expecting for the full year looks a little too conservative. So for this upward division that you did, have you accounted for the third and fourth quarters that conditions are going to stay strong, or have you only accounted for the strength you've seen in the first quarter? Can you share with us your views? This is Hiki Nyuma speaking. Typically, we do not do revisions in the first quarter, but we did it this time around because Q1 was quite strong, so we reflected that in our expectations. Of course, we have been reviewing. We do create foliar expectations as well, and we have accounted for some impacts, but at this point in time, We look at the order fulfillment rates for mining and we are currently at around 70-80% and that has led to our current projections. To say a little more, deliveries that can be made during this fiscal year have been accounted for in our updates. And we are not yet at a time where we can exceed what we have set forth. Thank you, I see. My second question is regarding tariffs and passing on prices increasing selling prices so you are not doing that for tariff increases you do price increases inclusive of tariffs and not just for tariffs alone and I presume that Caterpillar is not as aggressive either but for price increases is it easier to do and because you're getting the refunds Have you been receiving requests from customers to cut your prices? Or have you decided on a policy as to what you're going to do with the refunds you get? This is Sosatani speaking. Regarding tariffs. Tariff costs and passing that on to selling prices is a practice we don't resort in. What we are doing when it comes to price improvement are through our regular price increases. Up until now, tariffs were irrelevant to our price increases and this policy remains unchanged. Therefore, regarding the refunds of tariffs, in Q1, it proceeded quite rapidly and for this fiscal year, as planned, we are expecting $30 billion of refunds. But this is irrelevant to our pricing strategy for customers, so this will be reallocated back to our costs and inventories. I see. Thank you. That's all from me.

Thank you. Next questioner, please. Nikki Kesh, Kota Kessan, please. This is Otake from Nikkei. Can you hear me? Yes? Thank you very much. And I would like to ask you about pricing strategy. Yes, I heard about your explanation about the foreign exchange rate. And you've made some adjustments to the pricing in some regions, but your understanding of The competition about their pricing and price increase and going forward, do you have any change in your thinking as to raising your prices? Hosotani will respond. Well, price increase and pricing policy. Well, there are different factors that determine the pricing. So, for example, we look at each of the markets, and when we produce our products, there are different raw materials that we use, so we look at the raw material cost and the inflation of the market and demand. And the competition, of course, is something that we do make reference to, but we, overall, Take into consideration different factors in determining our prices. And this policy continues to be the case. We have not made any changes. And in regards to tariffs, as I said, well, the cost increase due to tariffs, this has not been passed on to our selling price. So that has not been the strategy for us. We look at different aspects. Well, it depends on the market, but we look into different factors in deciding when and how much to increase the price. Thank you for that explanation. Having heard that, you say that you incorporate different factors and the market environment is changing. But from your perspective, is it now easier to raise prices? Or is it more difficult? So what is the environment vis-a-vis price increase? Well the environment, well rather than talking about the environment, our way of thinking is that prices are, well we offer the value to our customers and the price has to reflect that value that we offer. The products and services that we deliver, and if the value of those products and services go up based on that, aligned with that, we would raise the price. That is our way of thinking. So, you're asking whether the environment is making it easier or less easy to raise prices? Rather than that, What's important is to look at whether or not our products and service value is increasing or not, because this is the trigger which determines whether or not we raise prices. Thank you.

Thank you for the question. Now, unfortunately, we only have limited amount of time left, so next person will be the last person. Adachi-san from Goldman Sachs, please. Hello, this is Adachi from Goldman Sachs. Thank you for taking my question. Can you hear me? Yes. So the first question is about numbers and the second question about orders. So I just wanted to confirm some numbers. When you look at our results and plan and the volume product mix, can you give me the details and the breakdown and out of production costs. Can you give me the breakdown between tariff impact and tariff refunds and the Middle Eastern impact as well? Thank you. This is Soso Tani speaking. For Q1 results, you need those numbers. For volume of product mix that results in expectations and for cost just the results from the first quarter is what I need. So for volume and product mix year over year minus 4.9 and the details were first for volume sales has grown so volume impacts there was a positive impact of roughly speaking $5 billion so plus 5 out of the total minus 4.9 billion and there was minus 10 billion also as an item first related to cost increases in the Middle East shipping compared to assumptions from April It turned out to be higher. So there were some cost increases there. And the rest, there has been a mixed difference year over year. Area mixed lives. Asian business was down. That led to more negative impact. So that's a comparison year over year. And also, Recording tariffs too, right? Yes. The breakdown of costs. Production costs. The breakdown of $18.8 billion. Regarding tariffs, cost itself was about $21 billion. On the other hand, for repartments, Like I've repeatedly been saying in Q1, it was a little bit over $9 billion I was accounted for. So net-net costs were a little bit over $10 billion. That's the impact, an increase year over year. By the way, how about the inflation impact coming from the Middle East and circumstances, or Middle East situation impact? Oil cost increased. However, in Q1, over the course of the three months of Q1, the impact was not that big and it was only several billions of yen. And quickly, I'd like to ask you about the BB ratio. Can I ask you the situation of K-Limited and Komatsu Germany? For K-Limited, Asia is a little challenging but the BB ratio looks good so I was wondering where you're getting the inquiries from and what are the destinations as well as the products and for Komatsu Germany the PC series year-over-year or it looks 50% worse so can you also walk me through the reasons why this is Kishi Numa speaking for the BB ratio It's a six month average that is being utilized for the numerator and denominator so when we make shipments it goes down so it's a little bit hard to track but for Komatsu Limited Indonesia is performing poorly but from a demand point of view or orders point of view shipments are proceeding whilst we're not receiving orders that's leading to these results and for example for mid-size sub trucks that we make in Ibaraki, if we're able to see an increase, we'll see better numbers. And it's not just Indonesia. That impacts the BD ratio too. For Germany, on the other hand, the value is high, but on a unit basis, or volume basis, actually, orders have been building up quite nicely. The order backlog are at extraordinary levels. However, when we go through shipments, the numbers turn out to be looking like this. So it's a difficult KPI to manage and communicate about. By the way, for K-Limited and Lipsize dump trucks, are they increasing because of the US or Australia? Is that where they're shipped to? Actually, Africa, and we've been seeing an increase there. And when we see an increase Thank you. Sorry I exceeded the given time. So unfortunately we have run out of time so we would like to end the Q&A session. This concludes Komatsu's fiscal 26 Q1 results briefing. Thank you very much for joining today.