Hitachi, Ltd. · TSE:6501

Hitachi — Investor Day (June 2016)

21 slides from Hitachi's investor day presentation, Jun 1, 2016

  1. Slide 1: Water Business Unit Business Strategy

    Water Business Unit Business Strategy Hitachi IR Day 2016 June 1, 2016 Kunizo Sakai Vice President and Executive Officer CEO of Water Business Unit, Hitachi, Ltd. © Hitachi, Ltd. 2016. All rights reserved.

  2. Slide 2: Contents

    Water Business Unit Business Strategy [Contents] 1. Business Overview 2. Market Environment 3. Business Strategy 4. Business Performance Trends 5. Conclusion © Hitachi, Ltd. 2016. All rights reserved.

  3. Slide 3: 1-1. Business Overview

    1-1. Business Overview A Comprehensive Water Service Provider that Responds to Market and Customer Needs Water Solutions Products ５７％ ３３％ Industrial Products BU Water BU - Business - Large pumps Water Business Management / FY2015 Leading Domestic Operation and Revenues Group* Maintenance 128.7 billi

  4. Slide 4: Contents: Market Environment

    Water Business Unit Business Strategy [Contents] 1. Business Overview 2. Market Environment 3. Business Strategy 4. Business Performance Trends 5. Conclusion © Hitachi, Ltd. 2016. All rights reserved.

  5. Slide 5: 2-1. Market Environment

    2-1. Market Environment Domestic Market will Remain Flat, Global Market will Continue Strong Growth Moving Forward Domestic Overseas  Facility construction will remain flat,  Water shortage will manifest on a primarily on replacement demand global scale and the water market will expand towards the

  6. Slide 6: 2-2. Target Position

    2-2. Target Position Leverage strengths to improve profitability, and aim to become a top global Group % １５ Company Hitachi B Operating income ratio (Future Target) Company Hitachi * For Hitachi, figures are based on the １０ A water business (2018) * For other companies, figures are based on similar

  7. Slide 7: Contents: Business Strategy

    Water Business Unit Business Strategy [Contents] 1. Business Overview 2. Market Environment 3. Business Strategy 4. Business Performance Trends 5. Conclusion © Hitachi, Ltd. 2016. All rights reserved.

  8. Slide 8: 3-1. Review of 2015 Mid-Term Management Plan

    3-1. Review of 2015 Mid-Term Management Plan (Reference) Previous 2015 Mid-term FY2015 Results Deviation Forecast *1 Management Plan Initial Target *2 Revenues 73.3 billion yen 73.7 billion yen (0.4) billion yen 77.1 billion yen Adjusted Operating Income Ratio 4.7% 5.8% (1.1) points 4.5% EBIT Ratio

  9. Slide 9: 3-2. Ideal Directions

    3-2. Ideal Directions Provide new solutions and services that leverage IT and the strengths of existing businesses ＯＴ ＩＴ Business operations Demand forecasts (PFI, comprehensive outsourcing) Demand response Operations/management Wide area monitoring (EMS, facilities management) Intelligent water sys

  10. Slide 10: 3-3. Business Strategy

    3-3. Business Strategy Leverage Advanced Technologies and Partnering to Lead Next-Generation Water Infrastructure (billion yen) [Revenues Target] Maintain and expand high share in water supply 90.0 billion yen and sewage market 100 73.3 billion yen Overseas 27%  Proposals that combine mechanical an

  11. Slide 11: 3-4-1. Regional Strategies in Overseas Business

    3-4-1. Regional Strategies in Overseas Business Business rollout in keeping with regional needs ● ODA projects ★ Seawater desalinization projects ■Engineering bases Developing countries/ emerging countries North America [Activities] - Urbanization, population growth - Droughts (Western, - Putting in

  12. Slide 12: 3-4-2. Expanding the Desalination Plant Business

    3-4-2. Expanding the Desalination Plant Business Leverage “differentiation technologies” to expand business in growth markets Desalination Plants for Large Cities: Energy-saving Desalination Plants: Mega-ton Water System Remix Water Using high-efficiency two-stage RO membrane Using treated sewage as

  13. Slide 13: 3-4-3. Create and expand service businesses through IoT utilization

    3-4-3. Create and expand service businesses through IoT utilization Establish high profitable service business models by leveraging the strengths of “IT x OT” - Reduce CAPEX, OPEX Needs - Engineering support, remote maintenance support Provide services using IoT platforms and - Respond to privatizat

  14. Slide 14: 3-5. Reduce Costs, and Strengthen Ability to Generate Cash

    3-5. Reduce Costs, and Strengthen Ability to Generate Cash Reduce costs and generate cash through the Hitachi Smart Transformation Project  Strengthen solution proposal capabilities Improvement rate by strengthening front structures 4 SG&A Gross Profit Margin  Increase efficiency and added value b

  15. Slide 15: Contents: Business Performance Trends

    Water Business Unit Business Strategy [Contents] 1. Business Overview 2. Market Environment 3. Business Strategy 4. Business Performance Trends 5. Conclusion © Hitachi, Ltd. 2016. All rights reserved.

  16. Slide 16: 4-1. Business Performance Trends

    4-1. Business Performance Trends [Revenues] (Unit: Billion yen) Domestic Business Expansion Overseas Business Expansion +3.7 90.0 +11.3 Overseas Business Expansion 73.3 +1.7 75.0 FY2015 (Results) FY2016 (Forecast) FY2018 (Target) [Adjusted Operating Income] (Unit: Billion yen) SG&A Reduction Expande

  17. Slide 17: 4-2. Business Performance Trends

    4-2. Business Performance Trends FY2015 (Results) FY2016 (Forecast) FY2018 (Target) Amount of orders received (billion yen) 74.0 75.0 ー Overseas revenue ratio 8% 17% 27% Revenues Adjusted Operating Income / EBIT (billion yen) (billion yen) 1,000 100 200 20 90.0 800 80 73.3 75.0 150 15 600 60 7.6 100

  18. Slide 18: Contents: Conclusion

    Water Business Unit Business Strategy [Contents] 1. Business Overview 2. Market Environment 3. Business Strategy 4. Business Performance Trends 5. Conclusion © Hitachi, Ltd. 2016. All rights reserved.

  19. Slide 19: 5. Conclusion: FY2018 Target

    5. Conclusion FY2018 Target Water BU ： Water Solutions [Scale of water business in FY2018]  Revenues: 90.0 billion yen Products (Increase by 22.8% over FY2015) 28%  Adjusted operating income ratio: 8.0% Revenues (Improve by 3.3 points over FY2015) 150 billion  EBIT ratio: 8.5% yen Industrial wate

  20. Slide 20: 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

  21. Slide 21: HITACHI Inspire the Next

    HITACHI Inspire the Next

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