Hitachi, Ltd. · TSE:6501

Hitachi — Investor Day (June 2017)

28 slides from Hitachi's investor day presentation, Jun 8, 2017

  1. Slide 1: Building Systems Business Unit Strategy

    Building Systems Business Unit Strategy Hitachi IR Day 2017 June 8, 2017 Hiroshi Sato Senior Vice President and Executive Officer CEO of Building Systems Business Unit Hitachi, Ltd. © Hitachi, Ltd. 2017. All rights reserved.

  2. Slide 2: Contents

    Building Systems Business Unit Strategy Contents 1. Business Overview 2. Management Strategy 3. Business Strategy 4. Performance Trend © Hitachi, Ltd. 2017. All rights reserved.

  3. Slide 3: 1-1. Business Profile

    1-1. Business Profile 1. Business Composition Manufacturing and Sales of Elevator & Escalator ① Sales, Manufacturing, Install 32% ② Renewal(Modernization) 29% FY2016 FY2015 Consolidated Consolidated Revenues Building Solution Service Revenues 585.8 billion 650.9 billion yen ① Maintenance for Elevato

  4. Slide 4: Contents

    Building Systems Business Unit Strategy Contents 1. Business Overview 2. Management Strategy 3. Business Strategy 4. Performance Trend © Hitachi, Ltd. 2017. All rights reserved. 4

  5. Slide 5: 2-1. Management Strategy [1]

    2-1. Management Strategy [1]  Provide Comfortable Smart Mobility Service (Expand Social innovation business) Basic  Develop the world’s latest “HUMAN FRIENDLY” products & services Policy (Caring and comforting customers)  Promote service business based on “Fiduciary Duty” (Services to meet custom

  6. Slide 6: 2-2. Management Strategy [2]

    2-2. Management Strategy [2] (Improve Hitachi’s position) Expand revenues and increase operating income ratio to become a global major player (Hitachi Target) : FY2016 – FY2018 10% Overseas Company D Overseas Company B Revenues growth rate Hitachi (Compound annual (Target) growth rate over the past

  7. Slide 7: 2-3. Management Strategy [3]

    2-3. Management Strategy [3] Execute business strategy for 3 markets (thousand units) ：CAGR(%) Entered market New Market Matured Growing •Take over No.1 NI market share •Extend footprint further •Establish business base toward •Expand renewal and service •Increase NI market share 2021 by founding ne

  8. Slide 8: 2-4. Global Strategy

    2-4. Global Strategy New market [EU area] Entered market [Progress westward: RCEP + Middle East] Russia UK •Expand business by extending global footprint •Accumulate maintenance base by increasing NI share EU countries, •Increase profit by improving maint. efficiency/contract ratio East Europe Tianj

  9. Slide 9: 2-5. Business performance trends and target

    2-5. Business performance trends and target FY2007-FY2009 FY2010-FY2012 FY2013-FY2015 FY2016-FY2018 Total Cumulative Ope. Income 83.2 billion yen 96.7 billion yen 174.3 billion yen 184.9 billion yen 539.1 billion yen (Index) (100) (116) (209) (222) - M&A, new business creation / diversification Expa

  10. Slide 10: 2-6. Prospects of FY2018 Mid-term management plan and measures to manage foreign exchange impact

    2-6. Prospects of FY2018 Mid-term management plan and measures to manage foreign exchange impact The targets are achievable, if the impact of foreign exchange in China is excluded Revenues Adjusted operating income 650 billion yen 71.5 billion yen Operating Income ratio: 11.0 % Foreign exchange (27)

  11. Slide 11: Contents

    Building Systems Business Unit Strategy Contents 1. Business Overview 2. Management Strategy 3. Business Strategy 4. Performance Trend © Hitachi, Ltd. 2017. All rights reserved. 11

  12. Slide 12: 3-1. Business Strategy

    3-1. Business Strategy Entered Market Business Strategy Matured market [Target increase in revenues by FY 2021:50 billion yen] (1) Take over No.1 new installation share (2)Expand Service Business • Increase share in new installation market (Take over No.1 position) China • Establish high efficiency

  13. Slide 13: 3-2. China Business Strategy

    3-2. China Business Strategy （Entered Matured Market） (1)China business expansion 【Revenues plan (Local currency)】 (1)China Business Strategy Take over No.1 New Revenues (index) ＋7% ＋3% installation share Revenues Expand service business 100 103 107 FY2016 FY2017 FY2018 Realize Expansion of (Resul

  14. Slide 14: 3-3. China Business Strategy

    3-3. China Business Strategy （Entered Matured Market） (3)Maintenance business strategy / Improve service quality by Four-Region business structure (1)Increase maintenance contract ratio 【Chargeable maintenance Contract unit plan】 by enhancing Maintenance sales structure (index) 1) Increase maintenan

  15. Slide 15: 3-4. Japan Business Strategy

    3-4. Japan Business Strategy （Entered Matured Market） (1)Expansion of New Installation Order Receive/ Take Over No.1 Share 【New installation order receive units plan】 Order receive units (index) Market Environment Residential demand will gradually decrease +2% Large scale PJs in specific areas in

  16. Slide 16: 3-5. Asia, India, Middle East Business Strategy

    3-5. Asia, India, Middle East Business Strategy (Entered Growing Market) (1)Establish Asia, India, and Middle East Businesses/ Increase O/R by new product 【New Installation O/R Plan for (1)Launch Global standard model Order receive units (index) Asia, India, and Middle East】 377  Launch Strategic m

  17. Slide 17: 3-6. India Business Strategy

    3-6. India Business Strategy (Entered Growing Market) (1)Enhance sales strategy / Strengthen sales and service network by expanding bases (1)Expand channel to all 8 Tier1 cities Delhi  Increase sales and service bases in entered market Ahmadabad Kolkata  Establish new sales base in new market Hyde

  18. Slide 18: 3-7. Growth Strategy for Renewal Business

    3-7. Growth Strategy for Renewal Business (1)Create global renewal business utilizing business know-how accumulated in Japan Market environment and renewal O/R plan Measures for business expansion  Increase in +20 years Hitachi EL/ES (2016:1,000 units→2021:13,800 units) (1)Establish business struct

  19. Slide 19: 3-8. Growth Strategy for Maintenance Business

    3-8. Growth Strategy for Maintenance Business (1)Expand maint. biz corresponding footprint extension, Improve profitability by increasing ope. efficiency 【Maint. Business Revenues Plan】 Region/Country Business Strategy by Region •Enhance maintenance service function by Common remote monitoring syste

  20. Slide 20: 3-9. Hitachi's Strengths (Elements of Business)

    3-9. Hitachi’s Strengths (Elements of Business) (1)Customers in various industry and global sales network Real estate, construction, railways, airports, finance, insurance, hotels, commercial facilities, hospitals, government offices, etc. Continuous customers Facility management company ・Japan: 70,

  21. Slide 21: 3-10. Building Systems Business in near future

    3-10. Building Systems Business in near future Establishing total building /facility management biz Elevators/Escalators Equipment(AC,etc.) Building Management Robots Service Connected home/Mobility エスカレーター EMIEW3 Other companies’ robot Global Control 【Field maintenance network base】 Parts Center Ce

  22. Slide 22: 3-11. Expand business utilizing Key technologies

    3-11. Expand business utilizing Key technologies (1)Adopt the world’s fastest elevator technologies to Hitachi’s products (1)Hitachi’s elevator marked 1,260m/min, the world’s fastest* speed (2)Key technologies Control panel Traction machine  Drive and control technologies for 1,260m/min  Safety fe

  23. Slide 23: Contents

    Building Systems Business Unit Strategy Contents 1. Business Overview 2. Management Strategy 3. Business Strategy 4. Performance Trend © Hitachi, Ltd. 2017. All rights reserved. 23

  24. Slide 24: 4-1. Measures to improve cash generation and cost strategy

    4-1. Measures to improve cash generation and cost strategy Cost structure reform and cash generation Common  Closure of low profit businesses Improvement ratio with no key technologies 2.0  Reduce indirect material cost 1.0 SG&A margin SG&A  Improve operational efficiency through 0.0 Work style i

  25. Slide 25: 4-2. Business performance trends

    4-2. Business performance trends Orders Received 580.8 599.0 626.0 (billions yen) 626.2 Overseas 59% 54% 56% 57% revenues ratio Adjusted operating Revenues 1,000 income/EBIT (Billion yen) (Billion yen) 800 1,100 120 (Over 11.0%) 650.9 650.0 620.0 100 595.0 600 70.5 585.8 68.5 72.0 67.3(10.8%) 60.1 7

  26. 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

  27. Slide 27: © Hitachi, Ltd. 2017. All rights reserved.

    © Hitachi, Ltd. 2017. All rights reserved.

  28. Slide 28: Appendix. Introduction of large PJ in 2016

    Appendix. Introduction of large PJ in 2016 Received large projects 1. AL ASSIMA [Kuwait] 3. Nihonbashi Muromachi 3 Chome 1) Largest scale complex building in Kuwait Redevelopment [Japan] 1) Core PJ for “Nihonbashi Revitalizing Plan” 2) 63 stories and 3 basement (Height: 345m) 2) 26 stories and 3 bas

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