Hitachi, Ltd. · TSE:6501
Hitachi — Investor Day (June 2012)
27 slides from Hitachi's investor day presentation, Jun 14, 2012
Slide 1: Rail Systems Business Strategy
Rail Systems Business Strategy Hitachi IR Day 2012 June 14, 2012 Hiroshi Nakayama Vice President and Executive Officer President & CEO, Rail Systems Company Infrastructure Systems Group Hitachi, Ltd. © Hitachi, Ltd. 2012. All rights reserved.
Slide 2: Contents
Rail Systems Business Strategy Contents 1. Overview 2. Market Environment 3. Business Performance Trends and Targets 4. Business Policy and Growth Strategy 5. Conclusion © Hitachi, Ltd. 2012. All rights reserved.
Slide 3: 1-1 Revenues by Systems and Products & Services
1-1 Revenues by Systems and Products & Services Transport management & control systems Rolling stock systems Signaling/traffic management systems Rolling stock/Overseas maintenance Signaling/train control systems High-speed trains Limited express trains 32% FY2011 Consolidated Revenues ¥139.6 billio
Slide 4: Contents
Rail Systems Business Strategy Contents 1. Overview 2. Market Environment 3. Business Performance Trends and Targets 4. Business Policy and Growth Strategy 5. Conclusion © Hitachi, Ltd. 2012. All rights reserved.
Slide 5: 2-1 Market Environment
2-1 Market Environment Global rail business environment and Hitachi’s initiatives Market environment Solutions Increased Demands for n Make lighter transportation environmental n Make more energy efficient systems with low awareness environmental impact n Apply smart grid technologies to rail system
Slide 6: 2-2 Market Trends
2-2 Market Trends Japan Increasing investment in services and environment-related areas, but major growth in capital expenditures cannot be expected Drop-off in construction of new Shinkansen lines, and increasing demand for replacement/upgrading aging lines, etc. Overseas ¥11 trillion per year (200
Slide 7: 2-3 Competitive Environment and Hitachi's Position
2-3 Competitive Environment and Hitachi's Position Position as a Total Systems Integrator Position Presence Billion yen Transport Rolling stock management & systems 1,000 control systems Overseas Company D Rolling Electrical Signaling/traffic stock components management Hitachi P P P Overseas Compan
Slide 8: 2-4 Strength and Key Targets
2-4 Strength and Key Targets Rolling stock systems Transport management & control systems Higher efficiency, lower environmental impact High reliability Aluminum train technology Signaling/train control systems (High-speed trains, commuter trains) technologies n Highly economical next-generation rol
Slide 9: Contents
Rail Systems Business Strategy Contents 1. Overview 2. Market Environment 3. Business Performance Trends and Targets 4. Business Policy and Growth Strategy 5. Conclusion © Hitachi, Ltd. 2012. All rights reserved.
Slide 10: 3-1 FY2011 Results and FY2012 Forecast
3-1 FY2011 Results and FY2012 Forecast (Billion yen) FY2010 FY2011 FY2012 Actual Actual YoY Forecast YoY Revenues 133.1 139.6 105 133.0 95 Operating 2.0 4.7 +2.7 3.6 -1.1 income • FY2011 revenues were higher year over year due to an increase in overseas and alleviation of the parts shortages caused
Slide 11: 3-2 Business Performance Trends and Targets
3-2 Business Performance Trends and Targets 60% [60%] Revenues [320.0] Operating income (Billion yen) Overseas revenues (%) 320.0 ratio(%) 300 28% 32% 24% [31%] [31%] 8.0% [8.0%] % 200 [134.0] [140.0] 5 133.1 139.6 133.0 Transport management & 100 control systems 3.4% Rolling [1.5%] stock systems 2.
Slide 12: Contents
Rail Systems Business Strategy Contents 1. Overview 2. Market Environment 3. Business Performance Trends and Targets 4. Business Policy and Growth Strategy 5. Conclusion © Hitachi, Ltd. 2012. All rights reserved.
Slide 13: 4-1 Business Policy
4-1 Business Policy Accelerate globalization with technologies developed in Japan Target Strategies Revenues : ¥320.0 billion Expand sales Overseas revenues ratio : n Strengthen Japan business base Over 60% n Expand overseas business Operating income ratio : 8% Achieve highly profitable structure n
Slide 14: 4-2 Expand Sales (Sustainable Growth in Japan)
4-2 Expand Sales (Sustainable Growth in Japan) Rolling Stock Systems Expand sales of aluminum trains (A-train) to municipal and private railways Secure Shinkansen market share [Hokuriku Shinkansen] Expand sales of electrical components Signaling/Train Control Systems Complete Shinkansen signaling sy
Slide 15: 4-3 Expand Sales (Expand Overseas Business)
4-3 Expand Sales (Expand Overseas Business) Rolling stock systems Expand maintenance business Promote standardization (global A-train and standardized inverters) Signaling/train control systems Expand sales focusing on products compliant with European standards (ERTMS*/ETCS and CBTC) Total project i
Slide 16: 4-4 Achieve Highly Profitable Structure: Rolling stock systems
4-4 Achieve Highly Profitable Structure (Realign Product and Business Portfolios) Rolling stock systems Establish highly profitable business model by capturing orders for projects with maintenance contracts and PPP projects Class 395 maintenance business Intercity Express Programme (IEP) n Under neg
Slide 17: 4-5 Achieve Highly Profitable Structure
4-5 Achieve Highly Profitable Structure (Realign Product and Business Portfolios) Generate earnings by focusing on signaling/train control systems projects China U.K. and Europe Medium- to high-speed railways Expand sales through joint n Expand sales of Chinese train development with Network Rail co
Slide 18: 4-6 Achieve Highly Profitable Structure
4-6 Achieve Highly Profitable Structure (Realign Product and Business Portfolios) Generate earnings by capturing orders for total project integration (E&M) Increasing demand for total project integration n Target projects • Urban transportation systems (metro, monorail) Station Signaling facilities
Slide 19: 4-7 Achieve Highly Profitable Structure (Promote Standardization)
4-7 Achieve Highly Profitable Structure (Promote Standardization) Generate earnings by standardizing products Global A-train Optimal product lineup by use n AT100 (metro) n AT200 (regional) n AT300 (high-speed) n AT400 (monorail) ETCS, CBTC Develop products compliant with European standards n U.K. :
Slide 20: 4-8 Global A-train (1)
4-8 Achieve Highly Profitable Structure (Promote Standardization) Global A-train (1) AT100 (metro) n Specifications • Maximum service speed AT200 (regional) 160 Km/h • Line length 20 to 26 m/car © Hitachi, Ltd. 2012. All rights reserved. 20
Slide 21: 4-9 Global A-train (2)
4-9 Achieve Highly Profitable Structure (Promote Standardization) Global A-train (2) AT300 (high-speed) n Specifications • Maximum service speed 200 240Km/h • Line length 20 26 m/car AT400 (monorail) n Specifications Large Medium Small Train formation 61m 57m 38m (4 cars) Train width 3.0m 3.0m 2.8m
Slide 22: 4-10 Promote Hitachi Smart Transformation Project
4-10 Promote Hitachi Smart Transformation Project Shift from management focused on the Japanese market to truly global management Rigorously promote localization Strategy Globalization of the total value chain n Establish overseas manufacturing bases and operation Production costs centers outside of
Slide 23: 4-11 Global Supply Chain
4-11 Global Supply Chain U.K. China •Expand maintenance business •Expand manufacturing bases for throughout the U.K. electrical components •Establish manufacturing bases for •Further develop signaling/train rolling stock control systems businesses •Enter signaling/train control systems •Strengthen a
Slide 24: Contents
Rail Systems Business Strategy Contents 1. Overview 2. Market Environment 3. Business Performance Trends and Targets 4. Business Policy and Growth Strategy 5. Conclusion © Hitachi, Ltd. 2012. All rights reserved.
Slide 25: Conclusion: FY2015 Targets
5 Conclusion FY2015 Targets Revenues : ¥320 billion Overseas revenues ratio : Over 60% Operating income ratio : 8% Accelerate globalization with technologies developed in Japan © Hitachi, Ltd. 2012. All rights reserved. 25
Slide 26: Cautionary Statement
Cautionary Statement Certain statements found in this document may constitute “forward-looking statements” as defined in the U.S. Private Securities Litigation Reform Act of 1995. Such “forward-looking statements” reflect management’s current views with respect to certain future events and financial
Slide 27: HITACHI Inspire the Next
HITACHI Inspire the Next