Hitachi, Ltd. · TSE:6501
Hitachi — Investor Presentation (April 2010)
18 slides from Hitachi's investor presentation, Apr 22, 2010
Slide 1: Hitachi Global Storage Technologies
Hitachi Global Storage Technologies Steve Milligan President & Chief Executive Officer April 22, 2010 ©2010, Hitachi Global Storage Technologies, All rights reserved.
Slide 2: 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 3: Hitachi GST Global Operations
Hitachi GST Global Operations 2009 Revenue: US$4.8B 35,000 Employees US Headquarters: San Jose, CA One of the industry’s largest patent portfolios US Headquarters San Jose, CA Sales offices & technical support located WW Manufacturing Laguna, Philippines Odawara, Japan Prachinburi, Thailand San Jose
Slide 4: Complete Product Portfolio
Complete Product Portfolio Personal Storage SimpleDRIVE, SimpleTOUGH and G-Technology Endurastar CinemaStar Mobile 2.5-inch Travelstar series Desktop 3.5-inch Deskstar series Solid State Drives (SSD) Enterprise 2.5/3.5-inch Ultrastar series
Slide 5: Recent Key Milestones
Recent Key Milestones 2007 2008 2009 2010 Recruit leadership team Focus on profitable execution Accelerate growth SSD partnership with Intel Branded products acquisition Substrate manufacturing acquisition
Slide 6: Improving Financial Performance
Improving Financial Performance $B 6 5 4 3 2 1 0 Revenue $5.6 $5.6 $4.8 2007 2008 2009 Operating Income / Margin % $M 300 200 100 0 (100) (200) (300) 3.7% 2.2% (5.1%) 2007 2008 2009 Gross Margin 20% 15% 10% 5% 17.8% 18.3% 8.9% 2007 2008 2009 Free Cash Flow * $M 500 250 0 (250) (500) $400 $393 ($461)
Slide 7: Competitive Overview
Competitive Overview Hitachi GST Segment Share Overall 15.6% Mobile 20.3% Desktop 10.5% Enterprise 22.5% Source: IDC 4Q09 WW HDD Shipments Segments Competitors Personal Storage Mobile Desktop Enterprise Seagate Western Digital Samsung Toshiba Vertically Integrated
Slide 8: Competitive Financial Trends
Competitive Financial Trends Hitachi has the Opportunity to Profitably Expand its Market Presence While Building Long-Term Value Revenue B$ 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 1Q Results Gross Margin % 35% 30% 25% 20% 15% 10% 5% 0% CY 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 STX Rev STX GM% WDC Rev WDC GM% HGST Re
Slide 9: Competitive Financial Trends
Competitive Financial Trends Hitachi has the Opportunity to Profitably Expand its Market Presence While Building Long-Term Value Revenue B$ 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 1Q Results Gross Margin % 35% 30% 25% 20% 15% 10% 5% 0% CY 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 STX Rev STX GM% WDC Rev WDC GM% HGST Re
Slide 10: Evolving Storage Markets – Threats & Opportunities
Evolving Storage Markets – Threats & Opportunities Storage continues to undergo a long-term transformation Data Volume Isolated PC & Network Storage Connectivity IP Networks & SANs Data Storage Cloud Computing 1980 1990 2000 2010 Change Mobility and netbooks Digital photography & HD video Social net
Slide 11: HDD Market Outlook
HDD Market Outlook Industry Revenue Growth (2009-2012 % CAGR) Enterprise (SSD) 59.3% Personal Storage 27.7 Mobile 10.5 Consumer Electronics 7.2 Enterprise (HDD) (1.5) Desktop (7.8) Total 7.4% B$ 33.9 IDC Forecast Update, Feb. 2010 M Units Source: IDC Dec. 2009 Hitachi GST is Targeting Profitable Gai
Slide 12: Strategic Focus Areas: 2010 and Beyond
Strategic Focus Areas: 2010 and Beyond Optimize long-term performance of the core HDD business Optimize supply chain Improve asset utilization Realize profitable growth Pursue new storage market opportunities for long-term revenue and earnings growth Personal Storage Solid State Drives (SSD) Continu
Slide 13: Optimizing the Core – Key Elements
Optimizing the Core – Key Elements Hitachi GST Focus Areas Market driven product planning Technology competitiveness Predictable and repeatable development process Flexible and responsive manufacturing Supply Chain Management (SCM) efficiency Effective distribution channels Market & Product Planning
Slide 14: Focus on Profitable Execution
Focus on Profitable Execution Improving Gross Margin and Cost Efficiencies Product mix optimization Supply chain efficiency Manufacturing footprint Disciplined Approach to Managing Operating Expense Improving operational execution to drive scale Selective investments for higher margin opportunities
Slide 15: Long-Term Financial Models
Long-Term Financial Models Financial Metrics Gross Margin Operating Expense % to Sales Operating Margin Capital Expense % to Sales Seagate 22%-26% 10%-12% 10%-14% 6%-8% Western Digital 18%-23% 9%-10% 10%-14% 7% Source: Seagate: NASDAQ Investor Conference (12/1/09) WD: F2Q10 Earnings Call Transcript
Slide 16: Hitachi GST 1Q10 Results
Hitachi GST 1Q10 Results Financial Metrics Revenue Gross Margin Operating Profit Operating Margin 1Q10* $1.46B +42% YoY $422M 28.9% $217M 14.9% 1Q09* $1.03B $118M 11.5% ($57M) (5.6%) * Quarterly results are unaudited Strong Financial Results and Ongoing Profitable Execution
Slide 17: Integrated Value Creation Model
Integrated Value Creation Model Value Creation Growth Opportunities Core Optimization Core Improvements 2009 2010 2011 2012 2013 2014 Value Creation Levers Complete core HDD optimization Expand storage portfolio Reduce debt through cash flow Invest in new storage technology Leverage partnerships & a
Slide 18: Summary
Summary Hitachi GST has a highly competitive, vertically-integrated business model Company transformation continues with improving trends in sustained profitability and cash flow Focused on responsible and profitable growth Improving scalability with disciplined cost management Optimizing core HDD b