Hitachi, Ltd. · TSE:6501
Hitachi — Hitachi Automotive Systems — Investor Day (June 2014)
25 slides from Hitachi's investor day presentation, Jun 12, 2014
Slide 1: Automotive Systems Business Strategy
Automotive Systems Business Strategy Hitachi IR Day 2014 June 12, 2014 Kunihiko Ohnuma Chairman & CEO Hitachi Automotive Systems, Ltd. © Hitachi, Ltd. 2014. All rights reserved.
Slide 2: Contents
Automotive Systems Business Strategy Contents 1. Business Overview 2. Market Trends 3. Growth Strategy 4. Business Targets © Hitachi, Ltd. 2014. All rights reserved.
Slide 3: 1-1. Business Concept
1-1. Business Concept Evolve into a highly reliable global supplier in the environment and safety fields by making automobiles smarter through advanced electronics and electronic drive and control technologies © Hitachi, Ltd. 2014. All rights reserved. 3
Slide 4: 1-2. Business Structure
1-2. Business Structure Drive control systems Powertrain & electronic control systems Electrically-driven intelligent brake Stereo camera Hybrid systems Motors Inverters Semi-active suspension 20% Electric power steering Safety field 30% Lithium-ion batteries Car information systems (Clarion) FY2013
Slide 5: 1-3. The Automotive Systems Group's Five Core Strengths
1-3. The Automotive Systems Group’s Five Core Strengths Management Utilize a global network of Global bases Footprint R&D Sales Global R&D Product Diversity Network A global network of Hitachi Expansion in product orders research laboratories The Automotive through cross selling Systems Group’s Core
Slide 6: Contents
Automotive Systems Business Strategy Contents 1. Business Overview 2. Market Trends 3. Growth Strategy 4. Business Targets © Hitachi, Ltd. 2014. All rights reserved.
Slide 7: 2-1. Global Auto Market Trends
2-1. Global Auto Market Trends Global Automobile Production Volumes by Region Ratio by vehicle segments (Million unit) 104.3 85.8 91.4 28% 71.3 61% 35% Emerging 65.7 nations’ 41% 65% 72% markets Industrialized nations’ 59% 39% markets (FY) FY 2007 FY 2020(Forecast) 2007 2009 2013 2015 2020 Small car
Slide 8: Contents
Automotive Systems Business Strategy Contents 1. Business Overview 2. Market Trends 3. Growth Strategy 4. Business Targets © Hitachi, Ltd. 2014. All rights reserved.
Slide 9: 3-1. Global Position Analysis
3-1. Global Position Analysis Electronics products* share of top 10 global parts suppliers by revenue in FY2012 70% FY2020 target 60% Breakdown of electronics products Company B Electronics products share Company C Environment Information 50% FY2015 target 50% field Company A field 42% 48% Hitachi S
Slide 10: 3-2. Three Strategies for Driving Global Growth
3-2. Three Strategies for Driving Global Growth Execute three strategies with an eye on 2020 1 Customer Strategy 2 Regional Strategy 3 Product Strategy Create new products and technologies and become No.1 in MONOZUKURI (manufacturing) capabilities in the world © Hitachi, Ltd. 2014. All rights reserv
Slide 11: 3-3. Expand Business Faster Than the Market Growth Rate
Customer Strategy (1) 3-3. Expand Business Faster Than the Market Growth Rate Market growth rate < Sales growth rate Strengthen account strategy through GAM/GAT Global auto production forecast n Expand product orders by strengthening FY2012 FY2015 cross selling 81.47 91.44 112% n Strengthen sales st
Slide 12: 3-4. Globalization and Business Expansion Through Cross-selling
Customer Strategy (2) 3-4. Globalization and Business Expansion Through Cross-selling Double revenues from Ford(FY2008 FY2012) …Currently Hybrid systems proposing Air-flow sensor Stereo camera Valve timing control Telematics control unit (Clarion) Taurus Water pump Electric power Balancer steering (
Slide 13: 3-5. A Global Footprint Aimed at Local Production for Local Consumption
Regional Strategy(1) 3-5. A Global Footprint Aimed at Local Production for Local Consumption Japan 25 bases Product business units Global corporate and domestic Group companies Europe Asia 280 China Americas 170 250 160 126 163 147 138 100 100 100 100 2010 2013 2015 2010 2013 2015 2010 2013 2015 201
Slide 14: 3-6. Strengthen Regional Management and Expand Business Around New Sites
Regional Strategy(2) 3-6. Strengthen Regional Management and Expand Business Around New Sites Americas China n Priority initiatives n Priority initiatives Full-scale expansion of business in Mexico Enhance sales system Present→FY2015 l Expand production in Mexico and strengthen l Sales personnel 50→
Slide 15: 3-7. Contributing to Build Attractive Automobiles
Product Strategy(1) 3-7. Contributing to Build Attractive Automobiles Propose next-generation systems by enhancing core products Contribution to make automobiles smarter [Expand electronic control and electric drive products] Propose next-generation systems 500.0 Revenues billion yen 370.0 billion y
Slide 16: 3-8. Expand Business Through Innovative, High Value-Added Products
Product Strategy(2) 3-8. Expand Business Through Innovative, High Value-Added Products World’s top share l Air-flow sensor World’s top share, track record of Engine 200 million units supplied Innovation World’s leading l Variable valve systems Revenues1.6 times* VEL: Achieves both fuel efficiency an
Slide 17: 3-9. Develop Technologies Eyeing Automatic Driving
Product Strategy(3) 3-9. Develop Technologies Eyeing Automatic Driving Achieve automatic driving through the smart ADAS* and Hitachi’s IT synergy Evolution of automobiles: Smart ADAS Fuse Hitachi’s IT and infrastructure Outside recognition Map and sensors traffic information, Data center big data, e
Slide 18: 3-10. Enhance Global R&D Capabilities
3-10. Enhance Global R&D Capabilities Collaborate with overseas R&D bases and utilize open innovation Hitachi R&D bases Hitachi Automotive Systems Collaboration among industry, (automotive systems-related) Technical Center academia and government Europe (Germany, China US France) n RWTH Aachen Unive
Slide 19: 3-11. Progress of Hitachi Smart Transformation Project
3-11. Progress of Hitachi Smart Transformation Project Execute the growth strategy with continuous innovation Cost structure reforms Business structure reforms (1) Global quality reforms (1) Realign the battery businessFY2015 target: double revenues (Vs. FY2012) n Full-scale roll out of the global q
Slide 20: 3-12. Strengthening Cash Flow Management
3-12. Strengthening Cash Flow Management Initiatives for improving free cash flows Issues and Areas to Strengthen Earnings Improvement Initiatives Improve operating cash flows n Bolster global TSCM and overseas business expansion (Raise inventory turnover) Raise fund efficiency n Enhance services an
Slide 21: Contents
Automotive Systems Business Strategy Contents 1. Business Overview 2. Market Trends 3. Growth Strategy 4. Business Targets © Hitachi, Ltd. 2014. All rights reserved.
Slide 22: 4-1. Business Targets
4-1. Business Targets FY2015 targets Revenues: 1 trillion yen, Operating income (EBIT) ratio: 7.0% Overseas revenue ratio for global customer bases 60% Revenues 57% Operating income (Billion yen) 50% 50% 53% (Billion yen) 1trillion yen7.0% 90 1,000 940.0 892.1 6.4% 80 (7.0) 811.5 806.8 800 (6.4) 70
Slide 23: 4-2. FY2015 Targets
4-2. FY2015 Targets FY2015 Targets nRevenues: 1 trillion yen (Overseas revenue ratio for global customer bases 60%) nOperating income (EBIT) ratio 7.0% nGross margin (1.0 point improvement) (Vs. FY2012) FY2013 result: 0.3 point improvement nSG&A expense ratio (1.0 point improvement) (Vs. FY2012) FY2
Slide 24: 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 25: © Hitachi, Ltd. 2014. All rights reserved.
© Hitachi, Ltd. 2014. All rights reserved.
Hitachi Automotive Systems — Investor Day (June 2014) on 6ix