Hitachi, Ltd. · TSE:6501

Hitachi — Investor Day (June 2017)

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

  1. Slide 1: Automotive Systems Business Strategy

    Automotive Systems Business Strategy Hitachi IR Day 2017 June 8, 2017 Hideaki Seki President & CEO Hitachi Automotive Systems, Ltd. © Hitachi, Ltd. 2017. All rights reserved.

  2. Slide 2: Contents

    Automotive Systems Business Strategy [Contents] 1. Business Overview 2. Market Trends 3. Growth Strategy 4. Summary © Hitachi, Ltd. 2017. All rights reserved.

  3. Slide 3: 1-1. Business Concept

    1-1. Business Concept Corporate Credo We will contribute to the realization of an affluent society by creating new value-added systems, products and services through the harmonization of people, vehicles and society. Contribute to Society by Providing New Solutions for Vehicle Manufacturing to Solve

  4. Slide 4: 1-2. Business Structure

    1-2. Business Structure Structure the Automotive Systems business segment around systems and products in environmental, safety, and information fields that together form an advanced vehicle control system Safety Field: 40% Environmental Field: 40% Aftermarket Integrated Chassis Control System Div./

  5. Slide 5: 1-3. Summary of FY2016

    1-3. Summary of FY2016 Capacity utilization rate improved although business forecast*1 was not achieved due to the influence of currency market fluctuations ■The deviation factors of the FY 2016 forecast in Hitachi IR Day 2016 and the comparison between the forecast and result excluding currency exc

  6. Slide 6: 1-4. Business Performance Trends

    1-4. Business Performance Trends Enhance the potential for growth, aiming for a growth rate that substantially exceeds the market growth rate by FY2020 Revenues Adjusted Operating Income 18,000 1,800 /EBIT (billion yen) : Overseas revenue ratio for global customer bases (billion yen) 16,000 1.600.0

  7. Slide 7: 1-5. Portfolio Trends

    1-5. Portfolio Trends Increase the ratio of electronics products while maintaining base in conventional products Trends for the ratio in revenues between conventional products and electronics products FY2020 (Target) FY2016 (Result) FY2018 (Target) Electrification and Autonomous Driving Growth drive

  8. Slide 8: Contents

    Automotive Systems Business Strategy [Contents] 1. Business Overview 2. Market Trends 3. Growth Strategy 4. Summary © Hitachi, Ltd. 2017. All rights reserved.

  9. Slide 9: 2-1. Automobile Society Issues and Solutions

    2-1. Automobile Society Issues and Solutions Keys to solve issues in automobile society are Electrification, Autonomous Driving, and Connectivity. Social issues Social needs Social trends Environmental Electrification Environ ment Environmental Environmental regulations conservation become System Ad

  10. Slide 10: 2-2-1. Market Trends – Roadmap of Electric-driven and Autonomous Driving Vehicles

    2-2-1. Market Trends – Roadmap of Electric-driven and Autonomous Driving Vehicles Autonomous vehicles based on electric-drive cars will be introduced into the market continuously from around 2020 Roadmapof Top5* Japanese,U.S., and Europeanautomobilemanufacturers 2015 Present 2020 2025 2030 Electric-

  11. Slide 11: 2-2-2. Market Trends - Changes in Production of EVs

    2-2-2. Market Trends - Changes in Production of EVs Global electric vehicle production volume will increase sharply, driven by China, the world’s largest automobile market Changes in Global Production Volume by Powertrain Type Market Shares of Electric-driven Vehicle OEMs in 2030 (Million units) 135

  12. Slide 12: 2-2-3. Market Trends - Changes in Production of Autonomous Vehicles

    2-2-3. Market Trends -Changes in Production of Autonomous Vehicles Global production volume of autonomous driving vehicles will expand dramatically, especially in China and the U.S. Changes in Global Production Volume of Autonomous Driving Vehicles Market Shares of Autonomous Driving Vehicle OEMs in

  13. Slide 13: Contents

    Automotive Systems Business Strategy [Contents] 1. Business Overview 2. Market Trends 3. Growth Strategy 4. Summary © Hitachi, Ltd. 2017. All rights reserved.

  14. Slide 14: 3-1. Targets in the Two Major Markets

    3-1. Targets in the Two Major Markets In the two major markets, strengthen focus on expanding sales to automakers with large market shares in electric and autonomous vehicles, and who already hold Hitachi in high regard. Plot Diagram of Market Shares in Electric and Autonomous Vehicle Production in

  15. Slide 15: 3-2. Customers Continuing to Use or Starting to Use Electric-drive and Autonomous Driving Products

    3-2. Customers Continuing to Use or Starting to Use Electric-drive and Autonomous Driving Products Customers which continue to use or have decided to start using Hitachi Automotive Systems electrification and autonomous driving related products are increasing *The photographs of vehicles of makers c

  16. Slide 16: 3-3. Example of Initiatives for Electric-drive Products - Motors

    3-3. Example of Initiatives for Electric-drive Products - Motors Collaborate with Honda Motor Co. to create synergy by combining knowledge and scale to strengthen competitive advantage and business base in the motor business Plan to establish new company in Japan in July and then establish subsidiar

  17. Slide 17: 3-4. Example of Initiatives for Autonomous Driving Products – Autonomous Driving ECU

    3-4 Example of Initiatives for Autonomous Driving Products –Autonomous Driving ECU Already demonstrated test driving with a prototype electronic control unit (ECU) equipped with various applications, aiming for early market introduction Test driving Demonstrated Test Driving on Hitachi vehicle Autom

  18. Slide 18: 3-5-1. Technologies for Megatrends – Superiority

    3-5-1. Technologies for Megatrends – Superiority Securing fundamental business and use system integration of electronic products as basis for increasing edge in technologies for megatrends in cooperation with Hitachi Group companies Megatrend Electrification Autonomous Driving Connectivity Enterpris

  19. Slide 19: 3-5-2. Technologies for Megatrends - Benchmarking

    3-5-2. Technologies for Megatrends -Benchmarking Comparison with global mega-suppliers shows that Hitachi has the all-round ability required to respond to megatrends Determination of all-round ability based on average score when ability to respond to three megatrends was rated out of 100 Source:Arth

  20. Slide 20: 3-6. Collaborative Solutions Provided by Hitachi Group

    3-6. Collaborative Solutions Provided by Hitachi Group The Hitachi Group companies have the linkages to connect people, vehicles and society 人 People Artificial Society Intelligence Hitachi, Ltd. Big Data Services & CRM Different Urban Smart City Platforms services Industries Industry & Smart Mobili

  21. Slide 21: 3-7. Business Targeting in Response to Megatrends

    3-7. Business Targeting in Response to Megatrends Significantly expand business in areas capitalizing on the electrification and autonomous driving megatrends by strengthening relationships with customers and offering one-stop-shop services Systems and Products Business Targets (FY2016 Revenues =100

  22. Slide 22: 3-8. Example of Expansion of Sales to Customers - GM

    3-8. Example of Expansion of Sales to Customers -GM Double revenues (from FY2016 FY2020) by expanding sales to GM through product-based and region-based measures Customer Rating Received “Supplier Quality Excellence” Award for the fifth consecutive year this year in recognition of the quality of our

  23. Slide 23: 3-9. Improvement of Performance in Two Major Markets

    3-9. Improvement of Performance in Two Major Markets Ensure growth rates that are significantly higher than the market growth rates of the world’s two largest markets China Americas Revenues (FY2010 Revenues = 100) Revenues (FY2010 Revenues = 100) （in CNY） (CAGR： （in USD） (CAGR： 270 FY2010-FY2020) 2

  24. Slide 24: 3-10 Measures to Strengthen Global R&D

    3-10 Measures to Strengthen Global R&D Utilize Hitachi Group’s R&D assets and open innovation on a global scale Establish development centers with North American centers as hub to strengthen autonomous driving system development Identify cutting-edge technologies in Silicon Valley Increase test driv

  25. Slide 25: 3-11. Manufacturing Innovation by Utilizing IoT

    3-11. Manufacturing Innovation by Utilizing IoT Utilize the IoT platform Lumada to promote manufacturing innovation through the establishment of digital production lines in five key regions. IoT Global Link Quality Assurance Design Americas Europe Finance ERP Vendors WMS Procurement Lumada Sales WMS

  26. Slide 26: 3-12. Cost Structure Reform and Cash Generation

    3-12. Cost Structure Reform and Cash Generation Execute growth strategy through structural reform and continuous innovation Promotion Details Improvement of CCC, Operating CF and ROA Cost structure reform Strengthen manufacturing and quality FY2015 FY2016 FY2017 FY2018 assurance capabilities through

  27. Slide 27: Contents

    Automotive Systems Business Strategy [Contents] 1. Business Overview 2. Market Trends 3. Growth Strategy 4. Summary © Hitachi, Ltd. 2017. All rights reserved.

  28. Slide 28: 4. Summary

    4. Summary FY2018 Targets and Growth Beyond FY2018 FY2018 Targets Revenues: 1.1 trillion yen (Increase of 10% from FY2015) Adjusted Operating Income Margin[EBIT Margin]：7.0%[6.9%] (Improvement of 0.8% [1.5%] from FY2015) ROA: 5.3% (Improvement of 0.4% from FY2015) Operating CF[Ratio]：105.0 billion y

  29. Slide 29: 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

  30. Slide 30: © Hitachi, Ltd. 2017. All rights reserved.

    © Hitachi, Ltd. 2017. All rights reserved.

Hitachi — Investor Day (June 2017) on 6ix