Hitachi, Ltd. · TSE:6501

Hitachi — Investor Day (June 2016)

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

  1. Slide 1: Industry & Distribution Business Strategy

    Industry & Distribution Business Strategy Hitachi IR Day 2016 June 1, 2016 Hiroyuki Ugawa Vice President and Executive Officer CEO, Industry & Distribution Business Unit, Hitachi, Ltd. © Hitachi, Ltd. 2016. All rights reserved.

  2. Slide 2: Contents

    Industry & Distribution 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. Business Overview

    1. Business Overview Collaborative partner creating new innovative values with customers in the field of industry and distribution -- Providing total solutions, from plant engineering to control and IT system-- Plant engineering Business Management ・ Design, ３４％ solutions*3 Installation FY2015 ５２％ ・

  4. Slide 4: Contents

    Industry & Distribution 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 Steadily increasing investment in the manufacturing and distribution industries for the next growth ● Projected investment ● Customers CAGR ■ New opportunities for growth based on World 3.3% Japan 2.8% 109 110 new demand and growing service market 100 ■ New competitors, mater

  6. Slide 6: 2-2. Target Position

    2-2. Target Position Toward a globally competitive position by means of own strength Company H ● Operating income ratio (%) 20 Company G Overseas IT solutions Overseas general ● 15 FA manufacturers Company J ● Japanese IT Japanese ● Company I engineering ● Company F 10 solutions ● Company B Industry

  7. Slide 7: Contents

    中表紙 Industry & Distribution 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 FY2015 results Difference Initial targets in 2015 Mid- forecast*1 term Management Plan*2 Revenues 714.6 billion yen 717.1 billion yen (2.5) billion yen 774.3 billion yen Adjusted operating income ratio (1.3)% 4.8% (6.1) points 5.4% EB

  9. Slide 9: 3-2. Direction

    3-2. Direction Provide services unique to Hitachi based on OT strength from existing businesses and experience in customers’ work site. Collaborative Creation (Open) Driver Base Digitalized Social Innovation Business Business Business ＥＰＣ Efficiency (Service business) ・Business support services Indi

  10. Slide 10: 3-3. Growth Strategy

    3-3. Growth Strategy Business strategy Target* ■Transition to digital service business Service １ ・ Establish service business based on IoT platform revenue ratio “Lumada”, collaborative creation with customers 61% → 66% and verification results ■Expanding industry-specific solutions ・ Revenues ・ Foc

  11. Slide 11: 3-4-1. Transition to Digital Service Business

    3-4-1. Transition to Digital Service Business Contribute to growth and problem solving by providing wide range of services, sharing, visualizing and optimizing information throughout the supply chain Measures  Speeding up development of new products and services Issues  Optimizing global factory,

  12. Slide 12: 3-4-2. Expanding Industry-specific Solutions (Automotive: CAE Automation)

    3-4-2. Expanding Industry-specific Solutions (Automotive: CAE Automation) Improve development efficiency and safety by sharing design data and know-how  Improving safety and quality, high functionality Measures Providing the same design cloud Issues (Automotive)  Increasing efficiency of design pr

  13. Slide 13: 3-4-3. Expanding Industry-specific Solutions (Pharmaceutical)

    3-4-3. Expanding Industry-specific Solutions (Pharmaceutical) Support high quality and highly reliable pharmaceutical businesses by IoT and plant expertise Measures  Maintaining stable supplies of bio-  Making use of various data analysis including AI, Issues pharmaceuticals, improving yields and

  14. Slide 14: 3-4-4. Activities targeting the logistics solution business

    3-4-4. Activities targeting the logistics solution business Create new value and new service business connecting different industries Insufficient drivers/trucks Measures Joint deliveries going round multiple sites Issues Traffic jams, delivery delays, wasted Collaborative Optimum deliveries (mi

  15. Slide 15: 3-5. Cash Generation and Cost Strategies

    3-5. Cash Generation and Cost Strategies Reap the benefits of BU structure fusion and the evolution of the Hitachi Smart Transformation  Increase efficiency and add value by Improvement rate strengthening pipeline management 20 SG&A Gross Profit Margin throughout the entire value chain 15  Strengt

  16. Slide 16: Contents

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

  17. Slide 17: 4-1. Business Performance Trends

    4-1. Business Performance Trends Revenues (Unit: Billion yen) Expansion of system solutions and plant engineering businesses +50.0 740.0 714.6 Expansion of system solutions business +6.1 690.0 Exit from loss-making and low-profit businesses, Portfolio revision (30.7) FY2015 (results) FY2016 (forecas

  18. Slide 18: 4-2. Business Performance Trends

    4-2. Business Performance Trends FY2015 (results) FY2016 (forecast) FY2018 (target) Amount of orders 766.1 700.0 ー received (billion yen) Service revenue ratio 61% 62% 66% Overseas revenue ratio 15% 15% 19% Revenues Adjusted operating income/ (billion yen) EBIT (billion yen) 800 800.0 740.0 56.0 80

  19. Slide 19: Contents

    中表紙 Industry & Distribution Business Strategy [Contents] 1. Business Overview 2. Market Environment 3. Business Strategy 4. Business Performance Trends 5. Conclusion © Hitachi, Ltd. 2016. All rights reserved.

  20. Slide 20: 5. Conclusion

    5. Conclusion FY2018 Target  Revenues: 740.0 billion yen (Increase by 3.6% over FY2015)  Adjusted operating income ratio: More than 7.5% (Improve by more than 8.8 points over FY2015)  EBIT ratio: More than 7.4% (Improve by more than 9.0 points over FY2015) Collaborative partner to create innovati

  21. Slide 21: 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

  22. Slide 22: HITACHI Inspire the Next

    HITACHI Inspire the Next

Hitachi — Investor Day (June 2016) on 6ix